Credit card fees and charges increase the monthly balance of the credit card. These fees and charges sometimes seem to come out of nowhere. An explanation of these fees can help the consumer manage their financial situations productively. Understanding the fee and why it was charged allows the consumer to call the credit card company and dispute the charge when necessary.
Annual fees is a set amount the consumer pays to have the credit card account. Many people do not pay an annual fee at all. Cards with incentive programs may have higher annual fees than those without. Research many different cards and apply for one with no annual fee. If a consumer has had the same credit card for over a year, make a phone call and ask them to remove the annual fee.
A late fee is incurred when the consumer pays the bank or credit card company after the due date. The late fee is also added to the credit balance if it was mailed before the due date but arrives after the due date. The late fee is different amounts depending on the card issuer, prior credit history of the consumer, and balance on the card. In addition to paying the late fee, credit card companies are very good at sending the late payment information in to the credit bureaus.
Over Limit Fee
These over the limit fees are added to the credit card balance when the consumers line of credit has been exceeded. The fee is a penalty for charging more than the amount of credit the consumer qualified for.
Returned Check Fee
The credit card must be paid monthly. Many people pay the card with a checking account. If the consumer does not have enough money in the checking account to cover the amount, the check will bounce. The bank may return the check to the credit card company as a “bad check.” The credit card company will add a “returned check fee” to the consumers account. A late fee will also be incurred because the payment was not made on time. And to add insult to injury, the bank will charge the consumer an overdraft fee for writing the bad check.
Hidden on the Back of the Credit Card Statement
The back of the credit card statement holds a wealth of important information about the fees and charges a consumer can expect.
Cash Advance Fee
A cash advance fee is charged to a consumer who requests to receive money instead of using the credit card at the store. This fee will either be a flat rate or a percentage of the advancement. Interest rates will also be charged on the cash advance amount. This interest rate is usually higher than the rate on purchased items. As a general rule, cash advances should be avoided.
Lost or Stolen Cards
If the credit card is lost or stolen the consumer will be responsible for the first $50 the thief charges. If the consumer calls the credit card company before it is used, no charges will be incurred. If the thief turns out to be a family member who used the card without the consumers permission, the charges will remain on the card and the consumer will be responsible for paying the bill unless the consumer takes legal action against the family member.
Other fees encompasses fees such as paying by telephone, reporting to the credit bureau, reviewing the account and other customer services. The credit card agreement will tell the consumer of other fees and charges that will be associated with the card.
Choose Credit Cards Responsibly
Shop for a credit card like any other item. Compare the features, fees and charges associated with each. Learn about how to avoid bad debt due to poor credit card management. Keep a low monthly balance and pay on time to avoid other fees and increased interest rates.