Credit cards are perfect for use on a daily basis, but they come with many different fees that you must pay whenever you use the card. Sometimes it feels like there is a fee for every little thing you do with the card.
Keeping track of all the fees you are paying on a credit card is not always easy. There are over-limit fees, late fees, transaction fees, balance transfer fees, minimum payment fees, and the list goes on.
In the long-run, you may decide that a credit card is just not worth your time, but unfortunately, it would be hard to live without them. We have decided to enlighten you on 3 important fees to look out for when dealing with your card. Read on to learn more.
Annual Fees
The annual fee is usually charged on most credit cards once a year, and it is a charge that is levied for the convenience of using the card. Certain cards come with annual fees, while others do not. It is one of the things you should be made aware of when applying for the card.
The annual fees usually range from $20 to over $200, depending on the lender. Although most credit card companies will have the option of waiving the annual fees in the first year, if you reach a specific limit or if you do something with the card that they have outlined.
You can avoid the annual fees by utilizing the promotion given by the lender. If you currently have a credit card that charges annual fees, consider changing to a card that does not. There are many options that do not charge you any fees for using the card.
Finance Charge
This is a monthly interest charge that is usually added to your account when you carry a balance beyond the grace period issued by the lender.
The finance charge is added each month unless you are able to pay the balance in full. Sometimes there is usually an exception if your card has a 0% interest rate. The amount of this charge depends on the balance of your credit card APR.
You can avoid this charge pay the credit card balance in full each month. It is much easier to incur debt on a credit card if you are not careful with the payments. If you anticipate difficulty in paying off your credit card balances each month, consider seeking deals that offer 0% interest.
Late Fees
A late fee is charged on your credit card account if you fail to make the minimum payment usually on the due date. Most companies will charge you late fees. Some will however waive this depending on the circumstances you might be experiencing.
Late fees are usually charged for each billing cycle in case you are late. Your first late fee can be charged as much as $28 and any other subsequent late fee can go up to $39.
If your credit card payment is more than 6 months overdue, it will be charged off and reported to the credit bureaus, impacting your credit report and score.
You can avoid the late fee charges by simply ensuring that you pay the minimum amount due each month. If you are slightly late on your payment, consider requesting leniency from your credit card lender to allow you more time to settle your outstanding balance.
Conclusion
With credit card fees, you have to be very smart about it as most companies tend to take advantage of their customers and charge them high fees which they can be unaware of. Keep checking your credit card statement to pick out these fees.
