Five Costly Credit Card Fees You Can Easily Avoid

five

As you probably already know, credit card issuers make much of their money on collected interest and outrageous fees.

See how credit card issuers make money for more on that.

And it seems everyday credit card companies are coming up with new, innovative fees to charge their customers.

Let’s take a look at five common credit card fees you can easily avoid with some common sense and responsibility.

Credit Card Late Fees

Credit card late fees have risen roughly 150% over the last ten years, with some late fees as high as $39.

To make matters worse, they will also charge you interest on top of the late fee, compounding the problem and taking more money out of your pocket.

You’re probably already getting charged credit card finance charges, so why let them tack on more debt?

One trick to avoid some is to set up alerts, which can be sent directly to your e-mail address or phone so you know exactly when your payment is due.

These services typically give you enough advance notice to ensure the transaction posts before the credit card due date.

Tip: Even if you already missed a payment and were assessed a late fee, it’s not too late. Either call the issuer or send them a secure message and more often than not they’ve waive the fees and interest.

Over-the-Limit Fees

For some reason, banks will let you use your credit or debit card to make purchases despite not having the available funds.  Then they’ll nail you with an over-the-limit fee.

Makes sense, right? Not! What you can do to protect yourself is request that ATM withdrawals, debit purchases and checks be approved only if you have sufficient funds in your account.

Banks such as Chase, HSBC, and Wells Fargo allow this.  You can also enlist overdraft protection, although be warned that this will only minimize fees, not eliminate them completely.

Additionally, you can add an alert in your account settings to let you know if you’re close to maxing out your card.

This way you can avoid making any additional purchases if you’re running out of spending capacity.

Balance Transfer Fees

Many credit card issuers charge you a fee to take on your existing credit card debt., especially if they offer you 0% APR.

Your debt is typically their reward, so look for a no fee balance transfer credit card if you can.

Some still exist, although they’re much harder to find these days as credit card issuers have wised up to the game.

You could be looking at fees of 3% of the balance up to $75 or even more depending on the issuer and their offer.

Either shop around and find a no fee offer, or look out for targeted offers from your existing credit card issuers.

Just note that it may actually make sense to pay a small fee if you can take your APR down to 0% overnight.

Foreign-Conversion fees

Many credit card issuers charge a foreign conversion fee if you purchase something from outside the United States.

For reference, Visa and Mastercard charge 1% of the total purchase price on all foreign transactions, while American Express charging a whopping 2.7%.

To avoid this nonsense fee, either apply for a card from one these issuers that explicitly waives foreign transactions, or get a Capital One card or a Discover card, both of which carry no foreign-conversion fee.

Pretty much everyone else charges one, unless you hold a premium credit card with an annual fee.

If you travel a lot internationally, grab one of these credit cards and make sure it’s accepted in the country you plan to travel in.

You don’t need to use it for everyday purchases, so set it aside unless you’re buying or traveling outside the U.S.

Credit Card Payment Fees

Some credit card issuers allow customers to pay their bills over the phone, though they typically tack on a fee as well.

These pay-by-phone fees can range from $5-$20 or more, and consumers typically only use these services because they don’t want to bother sending a check by mail, and they haven’t taken the time to setup the online payment method.

Make sure you take advantage of your credit card issuer’s website tools, which allow you to store payment information such as your checking account details so payments can be sent for free in seconds online.

Aside from it being free and convenient, it’s also important to have a reliable saved payment form at the ready in case you forget to make a payment and need to make one in a hurry.

Sometimes it takes time to verify a payment account, so set these up ASAP to avoid any delays (and extra fees!).

Read more: Are credit cards with annual fees worth it?

Colin Robertson

By Colin Robertson

Colin created this blog after spending several years in a job that required him to scour credit reports on a daily basis. His goal is to help individuals better understand their credit and get the most out of credit cards.

Leave a comment

Your email address will not be published. Required fields are marked *