How To Avoid The Most Common Credit Card Fees
Posted on February 24th, 2011
Credit card usage has increased dramatically over the past two decades and lending institutions that issue credit cards have seen their profits soar into billions of dollars each year. A great deal of the money earned by these lending institutions is from fees levied against accounts due to mismanagement by the account holder. There are a number of actions that can trigger these fees, but knowing how to avoid them will keep your interest rate down and your payments manageable.
Late Payment Fees
Late payment fees are charged against a credit card account when the minimum payment due on the account is not paid by the due date on the credit card statement. The fee for not making this payment in a timely manner can be as high as $35 and the fee will be charged each time a payment is not received on time. To avoid late payment fees, your credit card bill should be paid as soon as you receive it. This way, you will not risk forgetting the due date or mailing the payment late.
Interest Fees
Interest is charged to credit card accounts every month based on the balance of the account and the interest rate assigned to the account. These interest payments can be avoided altogether if the balance of the credit card is paid in full every month. A grace period of around 30 days is typically given to pay off new purchases without incurring any interest charges from the credit card company.
Overlimit Fees
Overlimit fees are added to the balance of the credit card account when a person charges more than the amount of credit available to the credit card. This typically occurs when the person is getting close to the credit limit and makes a purchase or has an annual fee posted to the account that pushes them over the established limit. The fee charged can be as much as $35 per transaction over the limit. Avoiding this fee can be as simple as only using your credit card for emergencies and paying cash for everything else.
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