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 more.
In the long-run, you may decide that a credit card is just not worth your time, but unfortunately, it can be hard to live without them. So, check out this article on 3 important fees to look out for when using your credit card.
The Annual Fee
The annual fee is charged on applicable credit cards once a year. The charge is levied for the convenience of using the card. Some cards have annual fees, while others do not. This fee is something important to note when applying for a credit card.
Annual fees usually range from $20 to over $200, depending on the lender. Some credit card companies will waive the annual fee for the first year if you spend a certain amount using the card or meet other promotional parameters.
You can avoid the annual fees by taking advantage of the promotion offered 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 for credit cards that do not charge annual fees.
Monthly Interest Charges
This charge is usually added to your account when you carry a balance beyond the grace period outlined by the lender. The interest charge is added each month, unless you are able to pay the balance in full. The exception is if your card has a 0% interest rate.
The amount of the interest charge depends on your card’s APR and the balance owing on your credit card.
You can avoid this charge by paying the credit card balance in full each month. It is very easy to incur debt on a credit card if you are not careful with making monthly payments. If you feel that you cannot pay the credit card balances each month, then look for card deals that offer 0% interest.
Late Payment Fees
A late payment fee is charged on your credit card account if you fail to make the minimum payment by the due date. Most companies will charge you this fee, but some will waive it depending on the circumstances you might be experiencing.
Late fees are usually charged for each billing cycle in the event that you are late to pay. Your first late fee can be charged as much as $28, with subsequent late fees can go up to $40 or more.
If you happen to be more than six months past due, your credit card may be charged off, and then reported to the credit bureaus, which can go on to affect 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 only late by a short amount of time, you can ask your credit card provider for leniency in this instance so they can give you time to pay what you owe.
Conclusion
With credit card fees, you have to be very smart, as most companies tend to take advantage of their customers. Always review your credit card statement to check for these fees.