Have You Heard About These 9 Credit Card Charges And Fees?
In our society, credit card users can be considered financially up and coming. Used in the proper way credit cards can be a great tool to create wealth, establish a financial reputation, and live the lifestyle that most people want, one of leisure and luxury. Credit cards can boost your finances with rewards and give you the convenience of not having to carry cash with you when you travel and eat out. If your credit card is missing, a simple call will put a freeze on it, and you won't even be responsible for fraudulent charges made without your consent. Most credit cards are unsecured, and 1 out of 2 Americans will pay their total balance monthly avoiding interest charges.
However, credit cards have an adverse effect on your credit score if you max them out and if you are careless and skip payments, or pay the minimum due. They can also be a source of unplanned for and hidden charges, penalties, and high-interest rates that will have users paying a steep price for every dollar in credit. For some users, it will take several years to pay off balances and be debt free.
Don’t pay more than you have to, beware of hidden credit card charges that can be avoided beforehand if you know about them. Being a smart credit card user means that those pesky penalties and additional charges are not compounded with your balance and interest rate. However, the big question mark is how do you identify some of these credit card charges, and what are the steps to take in avoiding them.
Have you heard about these nine not so uncommon credit card charges and fees under-listed below? And, what do you know about each of them?
9 Credit Card Charges And Fees You Should Be Familiar With
Have you heard about the nine most common credit card charges and fees that has disrupted the financial world lately? We believe this article would guide you on how to identify these credit card charges and avoid them for a frugal and prosperous you!
1. Annual Maintenance Fee
Just like video streaming services, credit card issuers have a joining fee that you pay as an annual fee. Make sure you know whether there is an annual maintenance fee associated with your card before you sign up. Ask the credit card issuer to remove this fee, or to give you an exemption for a year. Many will do so just for the asking. It doesn’t hurt to try. Credit cards with great rewards and point systems tend to have annual fees.
Research cards that are free to join. Shopping around for the right credit card for you may take a while but is worth the wait when you don’t have to pay extra fees.
2. Interest And Finance Charges
Did you know that most credit cards waive the first 50 days of interest? While this is a great benefit to take advantage of if your credit card issuer offers it, some premium cards will enforce finance charges regardless of where or when the card is used. Once the interest-free period is over, an interest and finance charge will be made to the customer unless full payment is made on time.
3. Cash Withdrawal Charges
Cash advances from ATMs are allowed by most credit card issuers. However, getting cash withdrawals from credit cards should be reserved only for emergency situations. The interest-free period that credit cards offer for all other transactions does not apply to cash withdrawals. Avoid the hefty interest rate and repay the cash withdrawal as soon as possible.
4. Over The Limit Charges
When users exceed their credit limits and cash withdrawal limits, a percentage of the excess spend is charged as a penalty. Expect to pay an additional char for exceeding your limits. Avoid having to pay an exorbitant penalty charge for exceeding your credit and cash limits by tracking your purchases, balances, and due dates.
5. Late Payment Charges
Late payment charges are not a right way of managing your credit card. Late payments affect your credit score and the fees, well, they compound your interest. Some banks charge over and beyond the standard late fee most banks charge. Ask your credit card issuer about late fee and make sure to avoid them. If you don’t have the funds to pay the total balance on your card, pay at least the minimum due.
6. Foreign Transaction Charges
If you travel abroad or know friends and relatives that do, be prepared to pay a foreign markup fee. Whether you are at a point of sale or online, international transactions are subject to a fee by most credit cards. Even cash withdrawal fees are higher abroad. Expect charges anywhere between 1.5 and 5 percent depending on the bank when you're making a foreign transaction. When traveling abroad, a travel card can keep you from having extra charges on your credit card bill.
7. Balance Transfer Charges
When you consolidate credit cards and pay off the balance in one by making a balance transfer to another credit card you might be charged for doing so. The amount of the charge is usually a percent of the balance that was transferred. Many reputable cards allow this free of charge, but high-interest cards with high balances typically charge a fee.
"They're in business for the charges."
If you pay off the balances on your cards, you can avoid this expensive way of moving debt from one account to another altogether.
8. Card Replacement Charges
If traveling or during their daily routine, some people lose or misplace their cards only to be stolen and used fraudulently. Report your card stolen or missing as soon as you notice whether you find it right away or not. The card issuer will freeze the card and avoid responsibility for any fraudulent activity. You may not know that some credit cards will charge a fee for replacing old or stolen cards.
9. Interest Costs
If you have a balance on your credit card and fail to pay it in full by the due date, an interest rate charge will ensue. This monthly interest rate is annualized at an annual percentage rate or AP which can be as high as 36-38 percent. For further information, please make sure to check out any credit card relief programs.
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