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Credit Card Fees Can Add Up

Francine L. Huff
LoanBiz Columnist

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Article Rating , 4 out of 5 based on 1 votes

It's important to understand what types of fees are involved when applying for   credit cards. Not reading the fine print of credit card offers can result in cardholders being hit with hidden fees when they least expect it. Here's what people need to know about keeping credit card fees to a minimum.

No Fee Isn't Free

Many people look for no-fee credit cards as a way to avoid an annual charge. But that doesn't mean there won't be other hidden fees. Some credit card companies charge a higher interest rate for no-fee cards. It's important to shop around and compare no-fee offers with credit cards that have an annual fee to get the best overall deal.

Credit Card Interest Can Rise

People can have their interest rate increased to 30% or even higher if they're late with payments, bounce checks, or charge more than their limit. Credit card companies often send out mailings that detail changes to their agreements. It's important to read through these notices carefully to stay up-to-date on card terms and conditions. Cardholders who don't agree with the changes can either close the account or negotiate to avoid interest rate and other fee increases.

Getting Hit With Late Fees

Each time a credit card payment is late, cardholders will be hit with a fee. For some credit cards those fees could be as high as $35. Consumers need to be aware of the billing cycle for their card and make sure payments will reach credit card companies on time. If putting a check in the mail won't get a credit card payment there fast enough, consumers may be able to pay their bill online or over the phone. Some credit card companies may charge a fee for phone payments -- verify this before you authorize payment.

Balance Transfers

Although balance transfer offers may sound really good, there is a cost to accepting them. Generally, balance transfer fees are a percentage of the transferred amount. Also, the introductory interest rate may only apply to the transferred balance, so it's important to know what the interest rate will be for ongoing purchases.

Other fees that can add up are fees for going over the credit limit, copies of credit card statements, and currency conversions. It's important to read through all the terms and conditions and ask questions before signing up for a credit card to avoid being hit with surprises down the road.

Sources
CNN Money
USA Today


About the Author
Francine L. Huff is a freelance journalist and the author of The 25-Day Money Makeover for Women. She has appeared on a variety of TV and radio shows.

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