Why do I see ‘arrear charges’ on my credit-card statement if I paid the minimum due?
Arrear charges are interest on any portion of the billed amount you did not pay by the due-date. Paying only the minimum due still leaves the balance unpaid, so interest is levied from the transaction date, usually 3–4 % per month. Example: unpaid ₹20 000 for 30 days can add ₹600+GST.
Hey, when I first noticed arrear charges on a credit card statement, it felt confusing because the term isn’t commonly explained. But once I understood it, it became easier to manage payments better.
What Are Arrear Charges in a Credit Card?
Arrear charges are fees that you are charged when you fail to pay your minimum due amount by the due date.
In simple terms, if you delay or miss a payment, your bank adds arrear (overdue) charges to your next bill.
This fee is applied in addition to interest on the outstanding balance, which makes late payments costlier.
Why Are Arrear Charges Applied?
• To penalize late or missed payments
• To discourage users from delaying credit card bills
• To compensate banks for delayed money usage
Impact on Your Credit Card:
• Increases your next month’s bill
• Affects your credit score
• Higher interest + fees make repayment tougher
How to Avoid Arrear Charges:
• Always pay at least the minimum due
• Set up auto-pay
• Track reminders via SMS/app