While credit is beneficial to consumers, it is necessary to keep your debt under control and understand all of the fees associated with your credit cards. Some of the common fees charged by companies are:
Annual Fee – This is charged on an annual basis for the privilege to have the credit card. It will be charged as long as the account is open regardless if you have used the credit card or not.
Account Maintenance Fee – This fee is usually associated with high-risk credit cards issued to consumers with low credit scores. The fee offsets the risk creditors take in issuing you credit.
Late Fee – This fee is charged when you fail to make your payment by the due date.
Over the Limit Fee – This fee is charged when you go over your set credit limit. New laws are in effect that prevent creditors from charging this fee unless you authorize the credit card company to go over your limit when you make charges.
Cash advance charges – On top of usually higher interest rates some companies charge a fee for withdrawing cash form an ATM with your credit card.
Interest Rate or APR (Annual Percentage Rate) – This is the rate credit card companies charge you on a daily basis when you carry a balance on your card. It has to be disclosed before the credit card is issued but can be raised or lowered while you have the open account. Credit card companies are required by law to notify you of any changes to your APR.
Balance transfer fees – The fee associated with this are charged when you transfer your balance form one credit card to another. Many times this fee can be avoided by shopping around for a new credit card that offers a promotional “No Fee” balance transfer.
By law all credit cards before they are issued have to disclose the fees associated with using them. In the past credit companies used some deceptive practices with fees, but recent laws have eliminated most of these practices. It pays to shop when deciding on a credit card especially if you have a high credit score. You can usually fined cards with a minimal amount of fees and a low APR, saving you money.
Our free consultation provides a significant amount of free credit education and can be based on your individual credit report as well.