Fees To Beware Of When Shopping Credit Cards
So you’ve found that APR you want. Maybe it’s zero or maybe it’s just incredibly low. Maybe it’s introductory, or maybe it’s for the life of the balance (unless you pay your bill late or make some other human error). But interest rate isn’t everything. There are some other fees you should be examining just as carefully. The place to check for these “surprise fees” is in the terms and conditions on the back of the credit card application or by clicking on the “Click for Information” link on the credit card’s web site.
The fees to watch for are as follows:
Annual Fees: There’s just no need for a card with an annual fee. You shouldn’t have to pay somebody to borrow money from them. It’s just not a good idea, and there are plenty of no-annual-fee options out there, so keep shopping around.
Maintenance Fees: Is the monthly maintenance fee charged only in the months when the card carries a balance, or is it charged in every month regardless of the balance information? The maintenance fee is usually only $5 or $6 per month, but it’s the principle of the thing. Why pay a maintenance fee on the months when your card requires no maintenance because there is no balance?
Over Limit Fees: These fees, penalties for charging more on your card than allowed by the credit limit, typically range from $29 to $35. It’s a good thing to be aware of, but it’s always going to be a hefty hit, so you should just make sure to stay within your limits.
Late Fees: Again, this fee is $35 on average and the best plan is to simply avoid paying your bill late. Amazingly, this fee has more than tripled over the last 14 years.
Balance Transfer Fees: One-third of all credit card issuers now charge this fee. It is typically a small percentage of the total transfer amount up to a maximum dollar amount, which varies by card issuer. This fee, designed to discourage “card-hoppers,” can amount to a pretty hefty sum tagged onto your account balance.
Never sign anything without reading it. Seriously. Get your reading glasses out and scour your credit card terms and conditions from top to bottom so you’ll fully know what you’re getting into.
