4 credit card fees you should always avoid
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Credit card companies don’t just make money by charging interest on balances that aren’t paid in full. They also make money by charging various fees to cardholders. No matter how much credit card you have, here are four fees to avoid.
1. Late payment fees
Late fees come into play when you fail to make your minimum payment by the time your bill is due. Want to avoid these fees? Don’t be late with your payments. Set up a calendar reminder so you don’t forget when your minimum payments are due. And also, be careful about the fees you make during the month so that you don’t end up in a situation where you are late with your minimum payment because you don’t have the money.
Believe it or not, a only late payment could result in damage to credit score. The lower your score, the fewer options you will have for borrowing money when you need it. It is therefore better to avoid being late.
2. Cash advance fees
Many credit cards allow account holders to access cash, but at a cost. When you take a cash advance, you will usually be charged a fee which can easily add up to 5% of the amount you withdraw. If you get a $ 1,000 advance, that could mean paying $ 50 more to get that money.
If you need cash in a pinch, you may want to consider purchasing a Personal loan instead of. One drawback with personal loans is that they generally have a minimum borrowing requirement. If you only need to borrow a few hundred dollars, a personal loan may not make sense. But it pays to explore your options apart from a cash advance from your credit card because of the high fees involved.
3. Annual fees that don’t pay for themselves
Annual fees aren’t always a bad idea. Annual fees that don’t pay on their own, however, are a waste of money and should be avoided. If you have an annual fee credit card and that card no longer gives you airline miles, cash back, or benefits than a no-cost card, then it’s worth emptying that card.
Also, before signing up for an annual membership card, research the benefits. And make sure you are likely to harvest them. A card with lots of cash back rewards for travel may not be a good choice for you if you don’t do a lot of travel. In this case, you could end up paying an annual fee for no good reason.
4. Foreign transaction fees
Some credit cards will charge you for switching your card abroad. And it’s not uncommon for overseas transaction fees to hover around 3%, which can get expensive if you spend a lot of time overseas and use your credit card frequently. Numerous travel credit cards don’t charge overseas transaction fees, so do your research, especially if you plan to travel a lot.
Credit card charges are not always inevitable. Do your best to avoid the above fees so that you can pocket more of your hard earned money for yourself.
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