Understand These 5 Credit Card Fees Before It Is Too Late. : ThyBlackMan

Tuesday, June 18, 2019

Understand These 5 Credit Card Fees Before It Is Too Late.

November 1, 2018 by  
Filed under Business, Money, Opinion, Weekly Columns

Like Love Haha Wow Sad Angry

(ThyBlackMan.com) Credit cards are great if you know how to use them. They can be very useful if you don’t have all the money at the moment you need to make a purchase. Also, a lot of payments happen digitally, so you simply need to keep up with the rest of the world.

However, credit cards have certain fees that can come as a surprise to some users. You need to realize that credit cards are not free. Using them will cost you money and it is up to you to decide how much money you are willing to spend on this.

This article lists the five most common credit card fees and helps you successfully avoid them.

Late fee

This fee is charged any month when your minimum credit card payment is not made by the due date. Almost all credit cards have a late fee, which can be up to $27 or even $38, depending on the inflation rate.

The late fee is charged one time per billing cycle when you are late until the moment when your card is charged-off, which is after you are six months past due.

If you want to use your credit card wisely and avoid late fees, make your payments on time. If you see that you can’t make the payment on time, contact your card issuer in advance to make a payment arrangement.

Over-the-limit fee

As the name suggests, an over-the-limit fee is charged when you exceed your credit limit. Luckily, this fee is less common because you can require to have over-the-limit transactions processed before the issuer can charge the limit.

This fee can go up to $35 and it can be charged up to two billing cycles when your balance remains over the limit.

Try to avoid these fees by keeping your credit card balance below the credit limit or simply opt out of over-the-limit fees.

Annual fee

One of the biggest credit card mistakes you can make is to apply for a card which is not the best for your situation. And trust us when we say that a card with a high annual fee is rarely a good option.

This fee is a yearly fee that you need to pay in order to keep your credit card open. It can vary greatly depending on the card, ranging from as low as $20 to as high as $550 annually.

A card’s annual fee is usually related to its reward-earning potential and other benefits, so it is up to you to decide whether the perks are worth the fee.

Some credit card issuers waive the annual fee during the first year, while others allow you to downgrade if your spending habits have changed and paying the annual fee doesn’t make sense anymore.

Also, you can ask your credit card issuer if there are any promotional offers available on your account. This can help you waive the fee or offset it with a statement credit if you agree to keep your account open.

Returned payment fee

If your payment isn’t honored, you could be charged a returned payment fee. This is common in case of check bounce, for example.

A returned payment could also lead to a late payment, but you will never be charged both fees for the same incident. Similar rules apply to both fees. The first violation could cost you up to $27, while additional returned payments can go up to $38.

Avoid this fee by keeping a close eye on your account balances and making sure you have enough money in your bank account when the card issuer deposits your payment.

If you have had problems with returned payment fees in the past, it would be wise to set up a budget and regularly balance your checkbook.

Foreign transaction fee

A number of credit cards have a foreign transaction fee, but you can also consider applying for credit cards without a foreign transaction fee.

If you choose a card with this fee, be ready to pay up to 3% of the U.S. dollar purchase amount. Keep in mind that the fee may apply to all non-USD purchases even if you make them while in the United States.

In general, travel rewards cards are your best bet if you want to avoid foreign transaction fees because they are designed for travelers.

Staff Writer; Jerry Parker


One Response to “Understand These 5 Credit Card Fees Before It Is Too Late.”
  1. Michael C. says:

    I’ve been burned by the foreign transaction fee before. And there’s also this other thing that got me once called dynamic currency conversion where they offer you the option of paying in the local currency or your home currency. The best answer if you get asked that is to pay in the local currency. That way you just get hit with whatever your card’s foreign transaction fee is, which could be just 0% like you said, but the dynamic currency conversion fee they’ll charge you to convert to your home currency is worse than a foreign transaction fee.

    Also, if you’re looking to earn good rewards, the reward calculator at http://www.creditcardtuneup.com/ can find good cards for your regular expenses.

Speak Your Mind

Tell us what you're thinking...
and oh, if you want a pic to show with your comment, go get a gravatar!