When you have a credit card, it can be easy to get used to the easy money that the service provides. It’s true that spending can quickly get out of control. However, even people who think that they have taken all the steps to manage their money responsibly can be surprise by excessive credit cards fees. With so many hidden or hard to understand charges, it’s important to get a handle on this money drain and make sure that your credit really is working for you. Here’s just a few things to look out for.
This fee is pretty standard among all credit card companies. Your provider wants to encourage you to pay on time and penalizes you if you don’t. Companies make a substantial part of their profits on these credit cards fees. The best way to avoid this is to pay on time. Some companies actually have a specific cut off time that they want to have your payment in hand and will charge the fee if it is even an hour later than specified. Try setting up an automatic payment schedule with your bank. If you get in a real bind, you should be able to call your company and pay over the phone with an electronic check. Just make sure that using that service won’t incur a processing fee as well. All cards have some kind of late fee attached.
Balance Transfer and Cash Advance
Most companies offer the convenience of using a cash advance service. You can use convenience checks sent periodically with your statement to pay bills, buy groceries or even write yourself a check. This service, however, is not free! There are credit cards fees associated with each transaction. If you transfer a balance to get relief from a high annual percentage rate, you can also expect to see a little extra charge. You will need to determine whether the fees associated with these transactions is worth the cost and use the services sparingly, at best. Most cards offer a cash advance service. If you are determining whether to use a balance transfer, check carefully to see what the associated fees are.
Over Limit Fees
Another category where you credit card will try to catch you unaware is your actual credit limit. It used to be that once you reached your particular credit limit, the company would cut off access and your card would be denied. However, the companies now usually let the transaction clear and just charge you credit cards fees for going over your limit. First, if you consistently live that close to the edge, you should really take a good look and your finances and manage your money better. To avoid it in the future, put away cards that you know are getting close to the limit. If you are unsure whether this may apply to your particular card, ask what the policy is on going over your credit limit.
There are several other ways that companies can try to get a little extra money out of you. Some will charge you to maintain your card even when it’s free from a balance. Others may claim that there are administration costs. If you feel you are being taken advantage of, you don’t have to keep your card. A company can not report negatively on your credit report for closing a card that is free and clear, regardless of what they may claim. Also, if you are a good customer, it never hurts to ask for credit cards fees to be removed or reduced. If you have a history of paying on time, your bank will likely be happy to remove a one time late fee to keep you as a happy customer.