Credit Help and Tips

Five Credit Card Fees You Can Avoid

As you probably already know, credit card issuers make much of their money on collected interest and outrageous fees.  It seems everyday credit card companies are coming up with new fees to charge customers.  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.  You’re probably already getting charged credit card finance charges, so why let them tack on more debt.  Get alerts sent directly to your e-mail address so you know exactly when your payment is due.  These services typically give you enough advance notice to ensure the transaction posts before the due date.

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.  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 HSBC, Wachovia and Washington Mutual allow this.  You can also enlist overdraft protection, although be warned that this will only minimize fees, not eliminate them completely.

Balance transfer fees

Many credit card issuers charge you a fee to take on your existing credit card debt.  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 amid the credit crunch.  Otherwise you’re looking at fees of 3% of the balance up to $75 or even more.  Discover currently has a no fee balance transfer.

Foreign-conversion fees

Most credit card issuers charge a foreign conversion fee.  Visa and Mastercard charge 1% of the total purchase price on all foreign conversions, along with whatever the credit card issuer charges, which is typically another 2%, totaling 3% of the purchase price.  Get a Capital One card or a Discover card, which carry no foreign-conversion fee.  Pretty much everyone else does, so if you travel a lot, grab one of these credit cards and make sure it’s accepted in the country to plan to travel in.

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 the credit card issuer’s web tools, which allow you to store payment information such as your checking account details so payments can be sent for free in seconds online.

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

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.

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