The Hindu Business Line : Andhra Bank hikes credit card charges

Coimbatore March 14 Andhra Bank has announced a steep hike in credit card service charge with effect from April 1. The bank has notified its card members that `due to increase in cost of inputs and services' the service charge has been revised upwards.

The industry average is about 2.95 per cent per month that worked out to a high 35.4 per cent a year. In reality, this turned out to be higher for those card users who carried over the balance from the previous month since many credit card issuers also added value of the fresh purchases made to the outstanding amount due and levied service charges for them as well.

As against the existing service charge of 1.75 per cent per month Andhra Bank has revised the service charge to 2.50 per cent a month. This amounts to an interest rate of 30 per cent per year and the increase in service charges worked out 27.9 per cent for the rolled over balance.

The service charge would also attract service tax, resulting in a further increase in the rates.

But if the card members defaulted in payment of even the minimum payment due - 5 per cent of the total payment due - the bank would levy a higher service charge of 2.95 per cent plus service tax on the unpaid balance.

The bank has also notified stiff penalty for late payments. While the late fee on delayed payments for balances up to Rs 5,000 would be Rs 200 plus service tax, on balances between Rs 5,000 and Rs 15,000, it would be Rs 300 plus service tax and on balances above Rs 15,000, it would be Rs 400 plus service tax.

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