Credit Card Fees
In 2007 credit card companies charged more than $18 billion in penalty fees to people who carried a revolving balance on their credit cards. This is a huge source of revenue for credit card issuers.
If you carry a balance on your credit cards, there are several things you need to watch out for:
Due date changes - Some banks have been accused of switching payment due dates. Also, some banks have narrowed payment periods from 31 to 20 days. If you are late on a payment, credit card issuers may raise your interest rates, charge a late penalty, or both.
Special charges or penalties - Many people know about late charges if a payment is late or missed, but there are other fees that can be charged as well. For example, there can be cash advance fees, balance transfer fees, foreign currency fees (if you use your card overseas), paying your bill over the phone, etc.
Unexpected rise in your annual percentage rate - Sometimes if you fall behind in payments to just one creditor or if you credit score drops for any reason, it can cause other credit card issuers to raise your APR. Also, some credit card issuers will raise your rate if you approach your credit limit.
Legal Rights Limits - Approximately 75% of credit cards have arbitration clauses in their agreements with the cardholder. This means that disputes must be resolved in private arbitration forums rather than in court. This can sometimes cause issue resolution with credit card companies to be increasingly difficult.
Typical fees of credit cards include:
Annual Fee - Is the fee for having the credit card. It is usually billed annually on your anniversary date (when the card was actually issued)
IMPORTANT: Watch annual fees, many card issuers waive the annual fee on the first year to make the credit card look more attractive. However, it is easy to forget to cancel the card before the anniversary date if you were planning to avoid the annual fee. Put a reminder on your calendar at work or home, to cancel one month prior to your anniversary date if you do not want to pay the annual fee.
Cash Advance Fee - This is the fee that is charged when you get cash using your credit card at an ATM or a bank. Typically these are very high fees, often the minimum is $5 USD. It is generally NOT a good idea to get a cash advance on a credit card if at all possible because of the fees associated with the transaction.
Balance Transfer Fee - This is fee that is charged when you move a credit card balance from one card to another card. If your credit score is favorable, it is fairly easy to find a card that will waive balance transfer fees if you transfer a balance from another account when you first open the new card.
In 2007 credit card companies charged more than $18 billion in penalty fees to people who carried a revolving balance on their credit cards. This is a huge source of revenue for credit card issuers.
If you carry a balance on your credit cards, there are several things you need to watch out for:
Due date changes - Some banks have been accused of switching payment due dates. Also, some banks have narrowed payment periods from 31 to 20 days. If you are late on a payment, credit card issuers may raise your interest rates, charge a late penalty, or both.
Special charges or penalties - Many people know about late charges if a payment is late or missed, but there are other fees that can be charged as well. For example, there can be cash advance fees, balance transfer fees, foreign currency fees (if you use your card overseas), paying your bill over the phone, etc.
Unexpected rise in your annual percentage rate - Sometimes if you fall behind in payments to just one creditor or if you credit score drops for any reason, it can cause other credit card issuers to raise your APR. Also, some credit card issuers will raise your rate if you approach your credit limit.
Legal Rights Limits - Approximately 75% of credit cards have arbitration clauses in their agreements with the cardholder. This means that disputes must be resolved in private arbitration forums rather than in court. This can sometimes cause issue resolution with credit card companies to be increasingly difficult.
Typical fees of credit cards include:
Annual Fee - Is the fee for having the credit card. It is usually billed annually on your anniversary date (when the card was actually issued)
IMPORTANT: Watch annual fees, many card issuers waive the annual fee on the first year to make the credit card look more attractive. However, it is easy to forget to cancel the card before the anniversary date if you were planning to avoid the annual fee. Put a reminder on your calendar at work or home, to cancel one month prior to your anniversary date if you do not want to pay the annual fee.
Cash Advance Fee - This is the fee that is charged when you get cash using your credit card at an ATM or a bank. Typically these are very high fees, often the minimum is $5 USD. It is generally NOT a good idea to get a cash advance on a credit card if at all possible because of the fees associated with the transaction.
Balance Transfer Fee - This is fee that is charged when you move a credit card balance from one card to another card. If your credit score is favorable, it is fairly easy to find a card that will waive balance transfer fees if you transfer a balance from another account when you first open the new card.