Hidden Fees in Credit Cards

Too many people today have credit cards and are not aware of the inconspicuous hidden fees. If a person signs an agreement for a credit card, they should read the very fine print that each contract contains.

While different credit card companies have different Annual Percentage Rates and may offer a fixed rate, there are many things that a consumer needs to know before they sign any sort of contract. The types of fees that you should know about are that of late fees and over credit limit fees, however, there are also transfer charges, conversion fees, closer fees, and inactivity charges. Each is just as irritating as the other when it comes time to pay the credit card bill.

The most common type of fee that people pay on their credit card bills is the annoying late fee that can be as much as $35. While there’s a specific date which the credit card bill needs to be paid on, there is also a specific time that it needs to be paid by. If a payment is even a few minutes late, there will be a late fee. However, making a call to the customer service department of the credit card company might allow the late fee to be waived. The interest rate on the credit card can also increase as their way of punishment for a late payment.

If an individual, couple, or family decides to travel, whether it is within the country or abroad, the consumer needs to know the kind of charges that will be incurred. Transferring money from a credit card to a bank account or taking money out of an ATM with a credit card can cost the consumer a charge of two to four percent of that balance transfer. That could result in a shortage of money when out on the town or on vacation. Conversion fees can cost quite a bit, especially when traveling to a country where the currency is two to three times the amount of the US dollar. Conversion fees can cost the consumer up to seven percent of the amount converted to the foreign currency.

Many people want to close credit card accounts after they’ve paid off the debt but what they don’t know is that it could be cheaper in the long run to keep the card and make small purchases on it. Closure fees could cost the consumer up to $50, just to close the account. The last fee that a consumer with a credit card needs to know about is an inactivity fee. If a consumer doesn’t use their credit card for an extended period of time, charges could be applied. Many credit card companies will charge up to $15 if a card is not used in up to six months. Some companies have a shorter period of time before they put the charge into effect. If the card is used occasionally to make small purchases that can be paid off at the payment due date, it will keep the inactivity fees at bay.

Making sure that a person reads the fine print at the bottom of a credit card contract will help the person to be aware of any charges that might occur. Also, making sure that they can afford the minimum payment amount will help keep the interest rates down, as well as help the person stay out of extreme debt. Paying at least the minimum amount on the card will help keep the person out of debt and will also help them stay away from having bad credit (though depending on the balance, paying only the minimum payment required is usually a bad idea). Always strive to pay your credit card balance in full each month.

Always know what the fees and charges will be.

—————————————————————

Hidden Fees in Credit Cards is a guest article written exclusively for HelpYourMoney.com. Do you have comments on this article? Share them below.