Do you know the costs associated with your credit card? Do your really know? Many people assume they do but arent aware of the hidden fees that many credit card companies are charging you month after month. In fact, if you dont keep a close eye on your credit card, you may end up paying hundreds of extra dollars per yearwithout ever knowing it! And if youre trying to budget your money, those hidden fees can add up! Lets take a look at some of the most common credit card fees, and then talk about how you can avoid them. Late Fees This is the one that likely gets most people and its a compounding charge so it affects several other factors of the total amount of your credit fees. When is the last time you checked to see what amount your credit card company charges you for a late fee? The truth is that these fees have doubled in just the past ten years, and that, combined with the reduced grace period which I will discuss shortly, means that the credit card companies are raking in a lot of dough on late fees! If its possible, you should try and send off the check (or electronic transfer) the day that you receive your credit card bill each and every month. There are three reasons why its important never to be late and these are critical to abide by to maintain a good credit score and lower fees. The first is obvious; you will want to do everything in your power to avoid a hefty late fee. Next, if you are late, it will likely be reported to the credit agency and you will have a bad mark on your credit report which will mean it will be difficult to retain low interest rate cards until you are able to repair your credit. The third is the interest, and well discuss it below. Interest Rate Hikes Did you know that if you are late even once on your credit card payment, the company will in all likelihood raise your interest rates to astronomical levels! Thats right; one late payment gives them the right to do it and most times its written in tiny little letters on the back of your credit agreement. You read that part right? Yeah me too! Whats more, that isnt just limited to your credit card payment. Any late payments from any lender that show up on your credit report gives them the justification to raise your rates, so be careful! Sites like http:///www.internetcreditcardlist.com clearly list interest rates and benefits of credit cards in readable text sizes so people like you and I have no surprises when signing up for a new card. Grace Periods We could always count on grace periods before we ever had to start paying interest in the good old days. For example, if we charged our card to the limit, and could get it paid off before the grace period expired, and then it would be like a free loan with no interest. The credit card companies are making this harder and harder to do and many of them have reduced the traditional 30 day grace period to 20-25 days or eliminating it all together. That means you are instantly paying interest any any charge you make right after you make it. How about your credit card? You need to take a close look at the fine print and find out what kind of grace period you have. If your credit card company has reduced it significantly, or eliminated it altogether, you should seriously consider canceling it and getting a more user-friendly card. Also remember the credit card companies need you to profit. Ever tried canceling a card? They dont like that very much because you bring in profit so if you dont like your interest rate, or your annual fee, or your grace period, call them up and tell them your switching. Chances are they will be very willing to listen! |
