The first way to avoid credit card fees is to be aware of where they are lurking and what you are most likely to get charged for. Sometimes the fees are actually worthwhile for what you get in return.
If you aren’t careful they can add up and pose quite a financial problem. Credit cards are known to charge quite a few different types of fees regarding different things. Of course, every credit card is a little different so you may want to check the terms of your individual card so you can be prepared for your individual circumstances. Here are some of the most common credit card fees.
The Most Common Credit Card Fees
One of the very first fees you are likely to be charged with regarding a credit card is the application fee or processing fee. Whenever you apply for a card you may find yourself with this fee. Although it is not as common as it once was, if you have bad credit, there is a much better chance of facing this particular charge. After your application is approved you may have to pay a one time account set-up fee.
Annual fees are another very common fee. They are also called membership or participation fees and are charged either by the year or a small portion every month. Some cards don’t have annual fees, however.
To avoid this fee you can look for a card without an annual fee or ask to have it waived which is a fairly common practice, but it usually only applies to the first year. You may also be able to avoid the fee by charging a designated amount of money on your credit card each year. This will depend on your card issuer so you’ll have to ask.
Depending on your credit card you might be charged a fee every time you withdraw cash using your credit card. This is called a cash advance fee. To avoid interest accumulating on the withdrawal it is wise to pay it off even before you are billed for the amount because these fees don’t have a grace period. You could also find a card which doesn’t charge this type of fee.
When you transfer a balance from one card to another you are most likely going to have a fee to pay. These fees are often a percentage of the balance being transferred, usually 2%-5%. They may also be charged as a minimum balance transfer fee or a flat rate. These fees are quite difficult to get around, your best chance is to find a different card.
How to Avoid Common Credit Card Fees
Late fees and over-the-limit fees can be avoided with healthy spending practices; this is the best way to save money. Sometimes accidents happen, however. Late fees occur when you don’t make the full payment on the due date, and if you usually pay on time then you can most likely get it waived. If you have a balance above your credit limit you are sure to find yourself with an over-the-limit fee. In this situation you may opt-in which will allow you to go above the credit limit.