Making Sense of Credit Card Fees

Everyone uses credit cards and they also get free offers in the mail. Sometimes a card looks too good to be true and this is something to check out more. In order to make sure you don’t pay a lot for the card, it is a good idea to make sure that you know the various credit card fees that can show up.

Before you start using a credit card be sure to check the Terms and Conditions that are usually spelled out on the very lengthy papers that come with the card. This paper will spell out all the fees as well as any information you need to know about using the card. 

The Terms and conditions will explain several types of fees. Here are some of the most common:

Annual Fees

You may or may not see annual fees for your card because this will depend on your credit score. Usually credit card companies offer a low interest, no annual fees card to their best customers. If you will pay an annual fee it will be spelled out in the terms and conditions. 

The annual fee can be anywhere between $49 and $99 depending on the card. If you must pick one of these go with the one with the lowest APR and look for any hidden fees; sometimes these cards will charge you more if your unpaid balance goes over a certain amount.

Fees for Cash Advances

It is never a wise move to take out a cash advance on your credit card but sometimes you have to do it. Keep in mind that these fees can be a flat fee of about $5 or it could be a percentage of the amount. Also, remember that you will pay interest on the amount as well.

Balance of Transfer Fees

These fees happen when you transfer the balance of one credit card to another one. This one can also be a flat fee or one that is a percentage. Check to make sure before you make this transaction.

Late Payment Fee

You usually have a grace period in which to make your payments but when you are late there is always a fee attached to it. This fee can go higher if you are repeatedly late or it can increase your interest rate. 

Fee for Going Over the Credit Limit

This is a fee that happens to most people and it makes them pretty angry. The challenge is that credit card companies give you an amount that you can safely go over and then they charge you a fee for doing so. Many times you will not know that you have gone over until you get the bill because you assume that they will stop you at your limit. This fee can be $25 or more, depending on the credit card.

Remember that when you do not pay on time this information can go to your credit report and if it is adverse over a period of time it can lower your credit score.