When looking for the cheapest credit card, you’re probably only looking at the interest rates to see which one is the lowest. However, hidden credit card fees are many of the fees associated with a credit card.
Usually, credit cards come with various other fees, which you won’t find out until later when you need to pay them off. So, unless you want to pay extra charges on your credit card, you will need to educate yourself about these hidden credit card charges.
A credit card with balance transfer has many advantages. If the introductory period of your existing credit card is about to end and you want to avoid paying those high interest charges, you can transfer the balance to another credit card, for more time to pay off the balance.
Plus, even if you have a lot of debt, you can opt for a balance transfer credit card to consolidate your debt and make it easy to pay off. However, not all of these benefits are free. Usually, you have to pay a balance transfer fee for this service.
These fees represent a certain percentage of the amount you transfer. Typically, it’s 3-5%, but some service providers may charge you even more. Therefore, before you decide to do a balance transfer, you should make sure that it is worth it, and the transfer fee will not end up increasing your financial burden.
You can visit online marketplaces, such as Credible, which will allow you to compare different credit cards and the amount of transfer fees they charge.
Annual service charges on credit cards are not uncommon. In fact, they are even more common for cards that offer additional perks such as rewards or cash back offers. The more benefits, the higher the annual fee can be.
With some credit cards, this amount is around $ 50, which can be reasonable. However, for some credit cards, this annual fee can exceed hundreds of dollars, which can be a steep price to pay if you don’t even use all of these perks and rewards.
Therefore, when choosing a new credit card, there are other hidden credit card charges that you want to consider carefully before making a final decision.
When it comes to hidden credit card fees, late penalties don’t really come out of nowhere. If you miss the last date to make payment, you expect to face a late payment penalty.
The exact penalty fee depends on the credit card provider, but it’s usually a standard amount of $ 25 to $ 40. Paying these fees once due to an actual problem shouldn’t be too much of a problem.
However, if you are facing serious financial problems and continue to miss payments, late penalties can only make matters worse. Therefore, if you want to avoid these fees, you should set up direct debits with the minimum possible amount to avoid the late payment penalty.
Besides the extra money and hidden credit card fees you have to pay, late penalties aren’t good for your credit score either. So, try to avoid them as much as possible. Plus, you can even consider talking to your credit card provider to waive the charge if you have a valid reason.
A penalty APR is one of those hidden credit card fees that a lot of people don’t know about. Late fees aren’t the only types of penalties you face. Sometimes the credit card companies may also charge you a penalty APR.
If you continually miss the last day to make your monthly debt payment or use up all of your available credit limit, you could face an APR penalty. This means that your credit card provider might charge you a higher interest rate as a penalty for your credit card’s performance as hidden credit card charges.
Penalty APRs are quite dangerous because they can trap you in a debt cycle that is difficult to escape. Especially if you are on a budget and are already struggling to pay off your debt, a high interest rate can make it even harder to get on your payments.
If you’re stuck with an APR penalty, try to get rid of it ASAP. Make the next payments on time and ask your provider to reduce the interest rate if you are eligible.
As mentioned earlier, the more benefits a card offers, the higher its fees. Likewise, some credit cards offer the option of cash advances. You can either write a check or withdraw money directly from the available line of credit.
However, you have to pay a cash advance fee to take advantage of this service. This can be a lump sum or a percentage of the cash amount you withdraw.
Usually, when you first sign up for a credit card, you have a choice of receiving a paper statement or an electronic statement of your credit card activity and account. If you choose the paper statement, you will have to pay it and it will be another hidden credit card charge.
Credit card companies have started charging for paper statements to discourage the use of paper, which is usually wasted, and to encourage customers to switch to electronic statements instead.
If you are wondering how to avoid all of these hidden credit card fees or at least be aware of them before you get a credit card, there is a very easy way. All you have to do is read the details and terms and conditions carefully. This also includes all the fine print, according to Tara Alderete, director of education at Money Management International. Once you know all of these hidden charges, you’ll be in a better position to decide what charges you can afford and which credit card.