Think you have a no-fee credit card? Think again! There’s no such thing as a credit card with no fees. Even if you have a ‘no annual fee’ credit card, lenders load the card agreement with hidden fees attached to almost every action beyond standard credit purchases. These nickel and dime charges can really add up. To avoid additional costs of hidden fees follow these suggestions:

Tips to Avoid Hidden Fees:

1. Know your credit limit - If you go over your limit, not only will you pay a fine as high as $50– but your interest rate could be raised as well! Contact your credit card company and ask them to place a ‘lock’ on the account to prevent over-the-limit charges.
2. Never make a payment late - This is one way lenders make tremendous profits. Schedule automatic payments through you bank to stop the piracy of charges as high as $39 on top of finance charges.
3. Destroy all so called ‘convenience checks’ - Along with a fee just for using a check, you will pay a higher interest rate.
4. Never take out a cash advance - Just like a ‘convenience check, you’ll pay a fee immediately and a higher interest rate.
5. Higher fees apply to foreign travel expenitures - Using your card abroad will typically cost around 3% of your purchase - so stick with traveler’s checks. Look for a card with the lowest foreign travel fees, if you must use a card overseas.
6. High costs to pay-by-phone - A per transaction fee up to $15 is levied just for making your monthly payment by phone. Use the online service or pay by mail to save! Each bank or finance institution may have specific ‘extra’ charges or fees.
7. Other hidden charges and fees - Watch out for other hidden fees such as replacement card fees, a fee for canceling ‘convenience’ checks or a charge for a copy of your statement.

Understanding the details of your credit card agreement is the key to avoiding hidden fees.  Before you apply for any credit card, make sure you go over your credit card agreement thorougly. If you don’t understand something, make sure you call and ask. This will help prevent unexpected charges.

Posted in Credit Tips, Card Advice

You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.