FinanceAttitude 10 Common Credit Card Fees That You Can Avoid
November 27, 2017 /Lydia Wanjiru/ — via FinanceAttitude.com | Do you have a credit card? Well, Americans owe over $1 trillion in credit card debts according to the Federal Reserve data analysis. Credit cards are the best and almost free short-term loans and can help you track your spending better than when you use cash. It is an excellent tool to use to budget your expenditure. There are fees charged by different credit card issuers that you should be aware of when choosing your credit cards and can be avoided. The credit card issuers put the details of such fees on the agreement and you should take time to read the fine print before you sign it. Here is a list of the 10 most common credit card fees that you can avoid:
1. The Annual fees
The annual fee is a fee charged once per year or can be deducted monthly where a portion of the fee is debited each month. The annual fee varies with different cards and is charged for the convenience of having and carrying that particular card. The annual fee is mostly charged on the secured, premium, travel, subprime, charge cards among others. The fee depends on the credit card and it mostly ranges from $25 to $500. This is to pay for the perks that usually come with using that specific card. The benefits that you get from using the card should exceed the annual fees you pay. Some credit cards offer a waiver of the annual fee in the first year of using the card. The cards that charge an annual fee target people who have a bad credit history. You can qualify for a card without the annual fees if you have a good credit history and avoid such fees.
2. The cash advance fee
You attract a cash advance fee usually amounting to $10 or 5% of the advance amount whichever is greater if you make a cash advance transaction. The fee is charged on transactions like an overdraft protection and credit card convenience checks and is charged every time you make a cash advance transactions. Avoid using your credit card like an ATM or a debit card to avoid this fee.
3. Foreign transaction fees
Some credit cards charge 2% – 5% of the transaction amount when you make a purchase in a foreign currency. If you are traveling to a foreign country or you intend to transact in a different currency, you can avoid this fee if you choose a credit card that doesn’t charge it.
4. The balance transfer fee
If you want to move your credit card balance from one card to another then you will be charged a balance transfer fee. It is a fee that is charged for balance transfer transactions usually $5 or 3% of the transaction amount whichever is higher. You can avoid transferring credit card balance to avoid being charged this fee. Credit Cube – online installment loans
5. Finance charge
The finance charge is charged monthly if you don’t pay your balance in full each month. The amount charged depends on the balance or the credit card Annual Percentage Rate. You can avoid this fee by paying the full amount you owe when it falls due.
6. The penalty fees
– Expedited payment fee
This is a fee charged if you want to make a credit card payment in the last minute to avoid late payment. This fee is usually around $10 – $15 but is cheaper than a late payment fee. Make your credit card payment earlier in the month to avoid incurring such a fee.
– Late payment fee
This is a fee incurred if you don’t make the minimum credit card payment by the due date. The late fee is charged once per billing cycle and is usually around $27 but can go up to $38 if you fail to pay by the due date in the past 6 months. This fee changes due to factors in the economy like inflation. The charge is up until the point where the credit card is charged off usually 6 months after you’re past due. Avoid credit card late payment to avoid payment of this fee.
– Over-the-limit fees
Credit card issuers put a limit on the credit card. If you exceed this limit, be sure to pay for it as you can be charged $35 maximum fee. It is charged up to two billings that your balance exceed the limit. You can avoid credit cards that charge the fee or opt out of over-the-limit by having the transactions that exceed your limit declined.
– Returned payment fees
This fee is incurred if your bank returns your credit card payment for lack of sufficient fees in your account. The returned checking fee is up to $35 and is charged every time your payment is returned. You can avoid this fee by making sure that you have enough funds in your account to cater for your credit card payment.
7. – Application fee
This is a fee charged for applying for credit card regardless of whether you are approved or not. Such cards mostly target those with bad or poor credit score rating. Improve your credit score to avoid the need to apply for such cards.
8. – Joining Fee
This fee is charged if you want to apply for a credit card and the credit card issuers approve and you receive the card. This fee is charged on some cards and you can opt for a different card to avoid the fee.
9. – Credit limit increase fee
This is a fee charged if you want to have your credit limit increased and can also be avoided if you don’t request for credit limit increase on your card.
10. – Credit card replacement fee
This is a fee charged if you want to replace your credit card with another in a short period since you made another replacement. Avoid replacing your card too fast to avoid attracting such fees.