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How to Avoid Credit Card Fees?

How to Avoid Credit Card Fees?

• Updated: May 16, 2016

Credit cards are a great tool if used properly. Credit cards can assist in unexpected expenses, they can help aid in rebuilding credit and they can earn rewards if you're smart about it. The downside of credit cards is that if you misuse them you could end up under a mountain of fees. We're here to help you understand what fees are most commonly associated with credit card use, and how to avoid them.

Credit card companies make the bulk of their revenue from fees, they rely on the 46% of people who mismanage their personal finances - rolling their balance over into the following month, incurring the interest rates applied to the account. Don't let that happen!

The other 54% of credit card holders are smart in how they use their cards. They know the fees that can be incurred, and by knowing these types of fees, they take swift preventative measures to avoid incurring them.

Types of Credit Card Fees

Basic account fees include:

  1. Application or Processing Fee
  2. Account Set-Up fee
  3. Annual & Monthly Fees

Usage fees include:

  1. Balance Transfer Fee
  2. Cash Advance Fee
  3. Processing Fee
  4. Foreign Exchange Fees
  5. Credit Increase Fee

Penalty fees include:

  1. Late payment
  2. Over limit
  3. Returned payment

Account maintenance fees include:

  1. Paper statements
  2. Insurance Fee
  3. Replacement cards 
  4. Customer Service Fee

How to Avoid Ever Paying Credit Card Fees

The simplest way to avoid paying the fees is to manage your monthly spend. Never spend more than you can afford to pay back in full at the end of the month.

The fees list above, is broken down so you can see at a glance the fees to avoid. From the very start, shop around for cards with the least amount of extra fees.

Usage fees are where the majority of credit card firms nail their customers so pay attention to how you use your card. The credit savvy consumer has more than one card to take advantage of the best loyalty programs on offer. 

► A credit card for shopping that offers cash back rewards
► A credit card for traveling that offers no foreign transaction fees

Most of these fees can be avoided by reading the fine print and thinking before you swipe. If you do notice a mysterious fee on your credit statement, call immediately and usually for first time offenders they bank will reverse the fees. Some fees are unavoidable, but the more you know, the better you can prepare. Click Here for more advice on smart credit card practices.

Click here to view all our no annual fee credit cards >>

 

Creditcards.org is a credit card comparison site. We have been providing our customers with the best credit card offers available since 2010. If you are looking for a new credit card, visit us here

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