Credit Card Deals - How to Avoid Unnecessary Credit Fees?
Read about Credit Cards before You Apply!
We all would love to obtain credit cards with no fees at all, but somehow those plastics we use almost every day have so many various fees and charges that it's getting difficult to manage them.
Typically, when applying for a card, customers pay attention mostly to an interest rate and an annual fee if there's any. But somehow, they overlook numerous hidden fees that may cost them dear. To be more exact, they cost millions of dollars a year. Read more and learn how you can identify and avoid hidden fees and surcharges.
These days, you can simply get lost in the ocean of credit cards. Lending organizations make irresistible credit offers to appeal more and more customers. Credit deals with no annual fee, balance transfers on favorable terms, and a great many of various rewards. That sounds fabulous, right?
But take your time and take a closer look at credit card disclosures, and most probably, you will find that some cards are not that great as they're painted. The best way to avoid hidden fees is to be aware of them. Once you can identify these fees, you can easily avoid them. So, what are the most common credit fees?
Annual Fee. This fee is charged by credit companies for the convenience of credit cards regardless of the amount of the purchases you make with the card. This fee may range from some $20 to hundreds of dollars. Fortunately enough, there are a lot of no annual fee cards. But if you've got spoiled or no credit, you can hardly avoid this fee. The higher your credit rating, the more fee-free cards are available to you.
Late Credit Fee. Probably, the most infuriating fee is a late payment fee. For credit companies, time is money. If your payment doesn't get to the lender on time, get ready to pay from $15 to $50. Besides, you will see higher interest rates on your card, so try to be on time with your payments.
Over the Limit Fee. Lenders would love to see a big gap between your balance and the amount of credit available. Maxing out credit card can hurt your credit score, and what's more, you'll be fined for this. So, if you plan some big-ticket purchase, make sure you've got enough available credit. Anyway, it is recommended to keep your debt-to-credit ratio as low as 30%. This will eliminate any over the limit fees as well as boost your credit score.
Balance Transfer Fee. When transferring a high-rate balance to another card, you may be charged a balance transfer fee. Unfortunately, there are not so many issuers offering plastics with no balance transfer fee but such cards do exist, and if you plan to transfer a balance on favorable terms, look for the cards that charge no balance transfer fee.
Cash Advance Fee. If you are going to get a cash advance from ATMs, think again. You will be charged a cash advance fee that amounts to 3% of the amount you borrowed. Besides, get ready to see extremely high interest rates on cash advances. The best idea is to avoid using credit cards for cash advances, or use them only in case of emergency. And bear in mind, cash advance fees may be rather hefty.
Foreign Exchange Fee. When making purchases overseas, including online purchases made at foreign sites, you will be charged a foreign exchange fee that generally equals to 3% of your purchase. But some card issuers offer lower fees or even none, so if you plan an overseas trip or you're a frequent online shopper, take your time to find the card that charges no foreign exchange fee.
