Credit card fees can add up quickly if you’re not careful. To help you save money, here’s a breakdown of the most common credit card fees and how you can avoid them.
1. Annual Fees
- What It Is: A yearly fee charged just to own the card, typically on premium cards with higher rewards.
- How to Avoid: Look for no annual fee cards, or see if the benefits of a premium card outweigh the cost. Long-term customers may be able to negotiate to have the fee waived.
2. Interest Charges (APR)
- What It Is: Interest charged on any balance not paid in full by the due date.
- How to Avoid: Pay off your balance in full every month to avoid interest. Consider cards with 0% introductory APR if you plan to carry a balance temporarily.
3. Late Payment Fees
- What It Is: A fee charged for missing your payment due date.
- How to Avoid: Set up automatic payments or reminders to avoid missing deadlines. Some cards offer late fee forgiveness for first-time offenders, so check your card’s terms.
4. Balance Transfer Fees
- What It Is: A fee (typically 3%-5%) charged when you transfer a balance from one card to another.
- How to Avoid: Look for cards with no balance transfer fees or low promotional rates. Be mindful of when the promo period ends to avoid unexpected interest charges.
5. Card Replacement Fees
- What It Is: A fee charged for replacing a lost or stolen card.
- How to Avoid: Keep your card secure to prevent loss. Some issuers provide free replacements, so check your card’s policy.
6. Cash Advance Fees
- What It Is: A fee (usually 3%-5%) plus higher interest for withdrawing cash from an ATM using your credit card.
- How to Avoid: Avoid using your card for cash advances. Instead, use a debit card or consider personal loan options if you need cash.
Tips to Avoid Credit Card Fees
- Opt for no-fee cards whenever possible.
- Pay your balance in full and on time each month.
- Avoid cash advances due to high fees and interest.
- Monitor your account regularly to stay under your limit and catch any fees early.
By understanding your card’s terms and being responsible with payments, you can easily avoid most credit card fees and save money!