6 Hidden Credit Card Fees That You Can Avoid

Any credit card owner can unknowingly become a victim of avoidable and unexpected charges. The Credit Card Accountability, Responsibility, and Disclosure (CARD) Act of 2009 protects us against the hidden charges and fees levied by credit card companies. Credit card companies are required to disclose all charges – and the methods adopted to calculate them – in the agreement. Reading those agreements can protect you from those unreasonable and unknown fees that you are paying because of your ignorance. Let’s find out what these fees are for and how we can avoid them.

Enhanced Credit Card Limit

Nothing is for free. For some subprime card issuers, if you get a call from your credit card company saying that your credit card limit is increased, be ready to pay for it. These subprime issuers may charge you as much 25% of the amount approved in order to receive a credit limit increase. In other words, for every $100 in increased credit limit, you pay $25 to receive it. It’s obvious that they will not mention this to you overtly, as they have already stated it in the agreement. This is yet another reason why you should take your credit scores seriously, so you can avoid encountering fees such as this.

Paying Online and On Time

Of course, paying late comes with a penalty of fees and/or interest. Moreover, paying online and on time can help you avoid paying extra. Each payment made by phone can cost you $10-$15. You can easily avoid it by paying online or by check. If you’re someone who isn’t always on top of your bills, setting up an automatic payment can be the way to go.

Old Credit Card Statements

If you need a copy of an old credit card statement, you may have to pay a bit extra if you can’t get it from the bank’s website. You can always tell bank that you are a good customer and they may waive that extra amount, which is generally $1-$10 or more, depending on how old are the documents that you seek.

Overseas Transactions

Most credit card companies charge some amount on every foreign transaction. If you order online and pay to a vendor in another country, you are charged with 2%-3% of your total purchase, sometimes more. Also, if you are traveling outside the US, you are charged these fees. This is mainly to cover the cost of converting foreign currency into US dollars. If you are a frequent traveler, look for a card that does not have such fees. Of course, if you do not travel abroad often, avoid such a card if you would be burdened with an above average annual fee.

Balance Transfer Fee

To move your balance from one card to another, a balance transfer fee is typically charged to the tune of 3% to 4% of the total value of the transaction. Also, at the expiration of the balance transfer period, you may need to pay interest in addition to the fees. So, it is better to pay off the credit card before this occurs. To avoid such fees, you can try calling up the card company and asking for a waiver.

Make sure that you read the fine print. You can also call the company to ask about cards with lower fees. It might be worth it to go up a point or two on the introductory interest rate if you can land significant savings on the transfer fee, particularly if your credit is not good enough to qualify for a card with no transfer fee.

Cash Advance Fee

You can borrow cash against your credit card, but you are liable to pay the fees. The fee is typically between 2% to 5% and usually incurs a higher interest rate than normal credit card purchases and ATM fees. Obviously, cash advances are not a good idea in general. It is better to look for other ways to get the cash, such as a personal loan or a line of credit.

Account Reactivation Fee

Don’t forget to cancel your automatic payments when you close a credit card account. This may lead to account reopening and you will then be charged for reactivation. There may be some other fees like a closure fee, inactivity fee, card replacement fee – in the event you lose your card, and so on. It may help to speak to your credit card company and ask them to reduce, it if not eliminate, the fee(s) completely. If you read the credit card documents you get with the welcome kit, you can avoid most all of the above fees. It’s a good exercise to read the monthly statements also.

If You Don’t Ask, You Don’t Get

My father always told me this, “If you don’t ask, you don’t get.” Any time you are charged a fee, you can ask to have it waived. It’s amazing how often this works – especially if you’re a long time customer in good standing.

At Fund&Grow, we specialize in getting the best credit card deals for folks looking to get $50,000 or more in credit. Give us a call at (800) 996-0270, and let’s talk about how we can help you.