Imagine having a credit card that makes all your financial transactions super easy, from paying for your favorite streaming services to making installment payments to daily transactions.
On top of that, credit cards often come with special perks like cashback, discounts, points, and more. Pretty awesome, right? But hold up! All these privileges come with some fees you’ll need to pay.
Credit cards have a few different fees, so you shouldn’t be surprised when your bill comes in each month. So, before applying for a credit card, let’s break down the different fees!
Generally, you will be charged an annual fee after 1 year of using the credit card since registration. The issuer very commonly charges this fee as a form of “compensation” for the services from the transactions you've made during the year.
The annual fee for credit cards usually ranges from IDR 300,000 to IDR 500,000, depending on the type of service you choose. But did you know that you can avoid paying the annual credit card fee?
You can apply for a credit card without an annual fee, like the Honest credit card. With Honest, you'll get access to a free annual fee.
Just like debit cards, credit cards charge administrative fees to their users. Why do we have to pay an admin fee even though we’re already paying installments with interest every month?
Well, credit card administrative fees are generally used as operational costs. These operational costs include every transaction activity you make. So, indirectly, you're paying for the “service” of the credit card issuer to provide their services.
The amount of this administrative fee varies and depends on each credit card issuer's policy. The larger the transaction amount and the credit card limit, the higher the admin fee you have to pay.
For Honest credit card users, you're only charged one fee, a monthly admin fee! But you don't need to worry because Honest's admin fee is calculated based on the remaining bill balance each month. Very beneficial, right? Plus, this admin fee will be 100% refunded if you pay in full and on time, so it's basically free!
Have you ever heard of the term “galbay” or failing to pay credit card installments? This happens when users have to pay a pretty big late payment interest. In the end, users feel burdened by the amount and choose not to pay their bills.
Actually, late payment fees are quite helpful. How come? These late fees help you be more disciplined in managing your finances each month. You already know the payment schedule and the amount due. So you can prioritize your credit card payments.
With this fee, you have the potential to avoid a bad credit score when checked by BI. If your credit score is bad, it will be difficult for you to apply for other credit cards or loans in the future. After all, we never know what might happen, right?
But, if you really want to avoid this fee, you can apply for a credit card that doesn’t charge late fees. Does one exist? Yes, one of them is the Honest credit card!
You might wonder why credit card transactions have a stamp duty fee. Well, this stamp duty fee is officially regulated by Law No. 10 of 2020 on Stamp Duty!
In short, this stamp duty applies to every transaction over IDR 5 million and multiples. You must pay IDR 10,000 for the stamp duty fee on such transactions. The good news is that this fee doesn’t apply to the Honest credit card.
Having a credit card doesn’t mean you can swipe without limits! Each credit card has its own limit based on the type of service you choose. Especially for a new user, the limit given is usually not as high as for those who have been using it for a long time.
If you ignore the credit card limit, you will incur an over-limit fee! For example, your credit card limit is IDR 5 million per month. Now, this month, your transactions have exceeded IDR 5 million. Automatically, you must pay an over-limit fee or “penalty” for the transaction.
Why do we even have to pay a penalty? I mean, the bill is going to get paid anyway, right? Before being approved, credit card issuers will check whether you can pay the monthly bill. Your credit score assesses this, which helps determine your credit card limit.
For example, if you're given a limit of IDR 5 million, it means the bank has determined that the maximum debt you can handle is IDR 5 million. So, if you exceed the limit, the bank's risk increases, hence the over-limit penalty.
That's why it's no surprise that when you apply for a credit card, they ask for many detailed documents—they want to make sure your financial situation is solid. But don't worry, there are ways to get your application approved! The key is keeping your credit score in good shape and ensuring all your supporting documents are complete.
Credit cards are not designed like debit cards, where you can withdraw cash. But, if you’re in need of money, you can withdraw cash from your credit card.
However, you will be charged a cash advance fee! This is because you’re borrowing money from the bank, and you will be charged credit card interest. The cash advance fee amount varies depending on each credit card issuer's policy.
For travel lovers, you need to know that there’s a foreign currency transaction fee for every credit card transaction abroad. This fee will be applied to every conversion from foreign currency to rupiah or vice versa.
Not just offline transactions, online transactions through e-commerce or foreign websites using a credit card will also incur foreign currency transaction fees. Fortunately, the Honest credit card doesn’t charge foreign currency transaction fees, making it perfect for traveling abroad or online shopping.
If your credit card is lost or damaged, you can replace it, but there will be a card replacement fee!
Just like debit cards, each new credit card requires additional costs for the replacement process. The fee usually ranges from IDR 50,000 to IDR 75,000, but it can vary depending on the credit card issuer.
Do you feel like your current credit card limit isn’t enough? You can request an increase from your credit card issuer. But there’s a fee charged for every limit increase request.
The increased fee helps you reconsider whether you really need a higher limit. The issuer also charges this fee to avoid promoting a consumerist lifestyle, as credit card limits are adjusted to each user’s capacity.
Now you know the different types of credit card fees. Ensure you understand the fee amount before applying for a credit card, so you won’t be overwhelmed when it’s time to pay your bill.
If you have Honest credit card, you don’t need to worry about these fees. You only need to pay one simple admin fee, with no other surprise charges.
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