Smart Ways to Avoid Credit Card Fees
Avoid credit card fees! Follow these tips.
The credit card commissions refer to the different charges associated with your card.
Unlike interests, which are only applied when you have an outstanding balance, these fees can appear for various reasons.
For instance, you might encounter an annual fee simply for holding the card, a balance transfer fee if you choose to move debt from another account, or foreign transaction fees when making purchases while traveling abroad.
It’s essential to acknowledge these fees to minimize or avoid unnecessary charges. Follow our tips, and we hope you can save hundreds of dollars.
Annual Commissions
Essentially, it is the fee you pay each year for having that credit card. Many people dislike paying any type of fees, but this one could really be worth it.
Annual fees are quite common in travel credit cards, which typically come packed with great benefits, such as higher sign-up bonuses and better rewards than standard cash back cards.
To determine if an annual fee makes sense for you, all you need to do is crunch some numbers.
Consider how much you spend: will the rewards you earn each year offset that fee? Can you get more rewards than with a cash back card?
If that’s the case, don’t let the word “commission” scare you!
But if paying an annual fee is not your thing, that’s totally fine! There are plenty of great credit cards that do not charge it.
Some of them even offer amazing benefits, such as car rental insurance, without charging you anything extra.
Financial Interests or Charges
When you keep a balance on your credit card instead of paying it off in full, the issuer charges you interest, also known as the Annual Percentage Rate (APR).
The way your APR is determined may depend on a few factors, such as the interest rates offered by the card and your credit history.
The best way to avoid these annoying financial charges is to pay your full balance on time every month.
Balance Transfer Fee Commission
Are you considering transferring a debt from one credit card to another? That’s where the balance transfer fee comes into play.
Usually, this fee ranges from 3% to 5% of the amount you are transferring. While some cards offer tempting deals, such as 0% interest on balance transfers for a year or more, it is crucial to calculate whether those interest savings offset the transfer fee.
Before you dive in, make sure to read the fine print!
Foreign Transaction Fees
Have you ever been on a vacation or made an online purchase from another country and noticed additional charges?
This is due to foreign transaction fees that some credit cards apply to purchases made in foreign currencies.
These fees typically range from 1% to 3% of your total spending and can add up faster than you think.
However, if you wish to avoid those charges, you just need to find a credit card that has no fees for foreign transactions.
Many travel cards are designed with this benefit, allowing you to enjoy your adventures or online purchases without worrying about additional costs.
Surcharge for Exceeding the Limit
A commission for exceeding the limit is what you will be charged if your balance exceeds the credit limit.
Fortunately, the Credit Card Act of 2009 protects you by preventing credit card issuers from automatically enrolling you in programs that would cover these fees.
On the other hand, you have the option to choose this program, which can help you avoid awkward moments at the checkout if you accidentally exceed your limit.
If you choose to go down this path, the most effective way to avoid this fee is to keep your balance comfortably below your limit.
If you are interested in learning more about credit cards, you can check out our upcoming article by clicking the button below.
