Five Unnecessary Credit Card Fees You Can Avoid

Credit card companies are in business to make money. They don't run charities for down-on-their-luck consumers, and they don't have access to the Money Fairy who provides them with funds to give their customers. Instead, they make money off fees and finance charges paid by the people who depend on them. Of course, this makes credit card companies sound evil, which they are not.

However, you can find yourself going broke over credit card fees, particularly when you don't know how they work. When your statement comes in the mail, you might find yourself unpleasantly surprised by the total owed, which is to be avoided wherever possible.

Following are five credit card fees you can avoid if you practice due diligence in maintaining your accounts.

1. Late Fees

If your credit card payment isn't sent and posted by the due date, you will be charged a late fee, which in some cases can be up to $39, depending on your balance owed. Late fees not only cost you in the present, but they can also be ammunition for the credit card provider to raise your interest rate and increase your finance charges.

To avoid late fees, you can sign up for electronic alerts with most credit card companies. Six or seven days before you minimum payment is due, they will send you an e-mail reminder. It gives you sufficient time to post a payment and can save you plenty of money in the process. You can also sign up for automatic payments with some accounts, which are withdrawn directly from your checking account.

2. Over-the-Limit Fees

When the balance on your credit card exceeds your credit limit on the account, you will be charged an over-the-limit fee. This can happen if your forget about interest charges on your purchases, or if you forget how much you've already charged during a billing period. Unfortunately, most credit card companies will allow you to go over your limit without declining the card, ostensibly to collect the over-the-limit fees.

If you want to avoid this scenario, you can request that purchases that exceed your limit be denied. Some financial institutions-such as WaMu and Bank of America-allow this to help protect their customers. Overdraft protection is another option, but fees are usually associated with this service as well.

3. Balance-Transfer Fees

Another credit card fee to avoid is the balance-transfer fee. In addition to charging interest on the amount you transfer, your credit card will also be charged a fee under most accounts. The amount varies from 1% to 3% of the total amount, though it is usually capped at around $75. Unfortunately, these fees can also put you over your credit limit (see above).

To avoid balance-transfer fees, find a card that doesn't charge them. Although they are few and far between, some cards have special balance transfer rates for an introductory period, and you can consolidate your debt without incurring any fees.

4. Foreign Conversion Fees

When you use your credit card in another country, the credit card issuer (Visa, MasterCard, etc.) will charge you a foreign conversation fee, which is usually around one percent of the total purchase price. In addition to that, your financial institution will charge you another fee (between two and three percent) to add insult to injury.

Some credit cards, such as the Discover More card and a few Capital One cards, don't charge foreign conversion fees. Apply for one of these and use it exclusively while out of the country to avoid these enormous credit card fees.

5. Payment Fees

A growing trend among credit card companies is the push for customers to pay online. With many companies, you get charged a fee ($3-20) if you insist on paying by telephone. The fee will be charged to your account and payable on the next billing cycle.

If this is the case for you, avoid the fees by signing up for an online account and paying over the Internet. This is easier-no hold times-and you won't be charged extra for the convenience.

Credit Card Debt: Avoid The Snares

It has been said a lot of times about credit card debt and although sometimes the words can be redundant, there are still many more issues that needs to be addressed.

We stress this mostly because time and time again, people with nice intentions of keeping on top of the credit card game end up falling victim to the snares these lenders have masked into their programs.

Bear in mind that credit card companies want you to slip up - that is the way they make money. Think you have a handle on all the ways the card companies can zing you? Here are a few of their not so obvious tricks:

Watch out for carrying balances. It is not uncommon for cards to charge 20% or more in interest. You knew that already, right? Well here’s the snare: Interest is usually called “finance charges” on your statements to lessen the impact of what you are really paying for. Finance charges doesn’t sound quite so bad right?

Fixed rates aren’t always fixed regardless of the terms and conditions you originally signed up for. By law, a credit card company can hike the rate by informing you 15 days in advance. That’s right - if they tell you 15 days ahead of time, it’s legal!

Remember that credit card companies make a lot of money on the cash advance game. There is usually a large finance charge for cash advances. Here’s the snare: Interest begins accruing as soon as you take the money out, not after the next statement closing.

Watch out for introductory offers! When you receive a credit card offer in the mail with a seemingly too good to be true low rate, it will likely expire in three or six months. Pay special attention to when and by how much the rate increases after the “introductory offer” expires. Many great card benefits suddenly vanish without warning once the teaser rate promotion expires.

Credit card debt is a legitimate problem source for most Americans. Being aware of the games played by the card companies can make all the difference in your ability to stay afloat in a sea of deception.

Debit Card

If for any reason you don't want to have a credit card, you want to make sure that you have a debit card. If you have a checking account with a bank, in most cases, you will be allowed to get one of these cards. They can be used almost anywhere credit cards are accepted, but they do work in a different way. These cards will only allow you to purchase something if you have enough money in your account. If you have problems with credit cards, this might even be a great alternative to stop you from overspending.

A good debit card is one that offers you buyer protection. Though not all of these cards will do this for you, you will want to ask at your bank to see if yours will. The good debit card will offer you the same protection a good credit card will, and you should be able to use it anywhere you buy or spend money. They are especially useful if you want to buy things online, or if you are going out of town where you know no one will accept a check from you.

If your debit card comes with credit protection as an optional feature, make sure you sign up for it. Also remember that your debit card is vulnerable if someone else were to get their hands on it, so if you find that your debit card is missing make sure you contact your bank at once. They will be able to cancel your card and possibly issue you a new one immediately. In some cases, you will not be liable for fraudulent charges made against your account while your card was out of your hands. However you must act fast if you find it missing or there may be nothing the bank can do.

As with a credit card, make sure you have a secure server when you are using your debit card online. Also remember that there are scam e-mails that will ask you to enter your debit card information under false pretenses. If you receive an e-mail from your bank asking you to go to a web site to enter your information, you should delete the e-mail at once and contact your bank. Your bank will never ask you for this information online. If you enter your information on one of these fraudulent sites, you have just given criminals the keys to your bank account. If you are ever in doubt - call your bank over the phone. If there is a problem, they will address it with you then.

Source: Credit and Debit Cards Tips