5 Credit Card Fees You Probably Didn’t Know About

There’s no disputing the fact that credit cards have become a basic necessity today; with all the awareness that’s being raised about the debt problems caused because of credit cards, people are beginning to realize the value of using them judiciously.

But there are other ways in which credit cards can cost you money - ways that are advantageous to your card company and detrimental to your interests (no pun intended). If you’re not careful when you sign up with your provider, you could end up paying a huge amount of money in extra fees and penalties alone.

Here are some basic precautions you need to take when you’re shopping around for credit cards:

1) Low APR Cards May Carry Annual Fees
Low interest cards are high on anyone’s priority list. But did you know that most providers who charge a low interest rate normally hit you with an annual fee? Scan the fine print on your agreement with a fine tooth comb to check for details relating to recurring costs that can slowly but steadily add to your total expenditure.

2) Fees for Extra Services
These kind of fees particularly apply to cards for people w/ bad credit. Some credit card companies charge extra for value added services like allowing you to pay your bills over the phone, replacing your credit card immediately if you report it lost or stolen, providing extra copies of your credit card bill or for setting up additional cards on the same account.

3) You May Be Charged Nominal Amount Even if You Pay in Full
If you think you’re safe from additional fees and penalties by not using your card and not carrying over a balance from month to month, then you have another think coming. Credit card companies earn their money on the interest you pay them and the various miscellaneous fines that they collect, so they’re not going to let you get away lightly by cheating them out of the interest. They charge you a nominal amount if you either put your cards on ice for a while or if you pay off the entire amount each month.

4) Balance Transfers Have Fees
If you’re having trouble paying the interest on your cards and thinking of transferring the balance to a low-interest card, make sure you take into account the handling and transaction fees associated with such a process. Some companies charge up to 3 percent of your balance, so check with them before you sign on the dotted line.

5) Low APRs Only for a Limited Time
Everyone’s interested in low interest cards, so there’s no surprise when most people choose the ones with the lowest possible interest when transferring balances. But the catch here is that the low interest is only for a limited period. You’d be wise to pay off as much as possible before the new interest rate kicks in. If you’ve been exceptional in your payments and feel you’re paying a higher interest than most of your friends, call your credit card company and try and get them to lower your interest. They’ll cave in if you’re a good customer because they’re not going to want to lose your business.