Before signing up for a credit card, it’s good practice to review the fee schedule and terms and conditions. Doing so will ensure that you have a firm grasp of what to expect as you begin to use your card.
There are some credit card fees that you can’t avoid, however, these are few and far between. The majority of fees only come into play when you make a mistake.
Let’s take a closer look at eight of the most common credit card fees:
1. Annual Fee
This is a fee that you pay for nothing more than to keep your account open. Annual fees generally range from $100 to $500. If you’re going to pay this, make sure you’re comfortable with what you’re getting in return for your money.
2. Interest Charges
You’ll only pay interest on your credit card account if you carry a balance from month to month. Protect against this by always paying your balance in full.
3. Foreign Transaction Fee
Do you often travel out of the country? If so, your credit card company may charge you a fee if you use your card.
Check on this before you depart, as you want to know exactly what it’ll cost you to use your credit card outside the country. This may change your approach to spending.
4. Late Payment Fee
A late payment can result in a fee, as well as a red mark on your credit report. Set reminders to ensure that you never make a late payment. You’ll thank yourself later.
5. Cash Advance Fee
If you take out a cash advance, expect to pay a sizeable fee. The fee is generally three to five percent of the amount you borrow.
6. Balance Transfer Fee
A balance transfer credit card allows you to consolidate multiple credit card balances. While it can save you money over the long run, expect to pay a fee in the range of three to five percent of what you transfer.
7. Returned Payment Fee
If you don’t have enough money in your bank account to cover the payment you made to your credit card company, you’ll get hit with a returned payment fee.
8. Over-the-Limit Fee
In most cases, your credit card company will deny any purchases you attempt to make over your limit. However, if you opted in to having these transactions approved, you’ll get hit with an over-the-limit fee.
Your goal is to protect against as many of these credit card fees as possible. Doing so will give you more confidence when using your credit card.
Do you have any experience with these credit card fees? Which ones seem to find their way onto your statement most often?