THERE are a lot of hidden costs on that credit card you own and if you aren't watchful enough, your monthly statement may shock you.

Here is a checklist on when and how your lender can slash you with charges.

You have an overdue payment

If you don't settle the minimum amount due by the due date, you would end up paying a late payment fee. This fee varies from bank to bank.

What if you don't pay your minimum amount due for two consecutive months? You become a defaulter. The course of action after that depends on the outstanding amount on your card and past track record. The bank will assign you a risk score, depending on which, the collection strategy changes. Also, any further transactions on your card will be blocked.

You revolve your balance
Banks give you this option to pay a minimum amount by the due date and carry forward the rest to the next billing period. In this case, you will pay an interest on the amount that you carry forward.

There's another catch: when you carry a balance from month to month, you do not get any 'interest free' period on new purchases you make.

Your payment cheque bounces
If you pay your bill by cheque and it bounces, you would have to bear a fee for dishonoured cheques. Also, if this payment is made very close to or after the due date, you might be in for more trouble.

The bank may not only increase your risk profile but also beyond the due date, you will have to bear all sorts of charges. This means, a fee for a bounced cheque plus a late payment fee and also a monthly interest on the outstanding amount!

You cross your credit limit

Credit limit is the maximum amount that you can spend on your credit card, as dictated by your income profile. You can spend more than your credit limit.

But wait! Be ready to pay charges if you exceed this limit, which can be as high as 5 per cent on the exceeded amount.

You transfer your balance from other cards
Banks often lure us with 'zero interest' balance transfer schemes. This means you transfer your outstanding balance from one bank to another without paying interest on the balance. But, the dream run doesn't continue for long.

Most banks allow a timeframe of three months, where you don't pay interest or pay a low interest on the transferred amount. But if you carry forward your balance beyond this time, be ready to shell out the bucks for interest charges.

You withdraw cash using your credit card
Apart from paying the regular interest of around 2.95 per cent, you will also have to pay a one-time fee of about 2-2.5 per cent of the amount withdrawn.

Moreover, the cash advance fee is higher if you withdraw from an ATM that doesn't belong to the bank whose credit card you hold. Also, for cash withdrawals, there is no credit free period. The interest meter starts ticking away immediately.

You forget to pay annual charges
In case you decide not to use your credit card and don't pay the annual charges; you are in for some trouble. Remember, you need to get in touch with the bank and intimate them that you don't want the card any further. Otherwise, you will unnecessarily have to pay the annual fee and a penalty, in case you cross the due date.