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Credit Card Fees You Should Avoid If Possible

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Advance Personal Finance

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Fees are something that not many people get excited over. When these fees come attached to a credit card they can usually get expensive. Here are five common credit card fees that you should avoid if possible.

Annual Fees

It’s no big surprise that annual fees come up first on this list. The reason is because they are the most common type of fee that credit card holders pay each year. Luckily for you there are some easy ways to avoid them.

The first way, and also the most obvious way, is to have a card that doesn’t charge an annual fee. No matter if you are interested in a cash back card or a travel reward card, there is an option for you.

Another way to avoid this fee is to contact a retention specialist with your credit card issuer. Right before the annual fee is going to be assessed to your account call the number on the back of your card and ask to speak with someone in the retention department. Let them know you are not sure the annual fee is worth it for your situation. Occasionally banks are eager to keep your business and will do whatever it takes. Sometimes that will waive the annual fee altogether and sometimes they will offer you bonus miles or points that have an equivalent value to what your annual fee is.

As a last resort, if they won’t waive the annual fee, you can ask to have your credit line moved to one of their no annual fee cards.

Balance Transfer Fee

Balance transfer cards can be incredibly valuable to anyone with debt. They can help you move your outstanding balance so that you can eliminate the interest you are paying for a period of time. Unfortunately, most of these cards also have a fee involved. Typically it is right around 3% of the balance you are transferring, but then you will have up to 18-24 months to pay it off before you begin accruing interest charges again.

Before you make the decision to use a balance transfer, sit down and run the numbers to make sure it makes sense for your situation. If it does, have the balance paid off before the promotional interest period runs out.

Foreign Transaction Fee

There was a time when a majority of credit card issuers would charge cardholders a fee to use their cards outside of the United States. Over the past couple of years a majority of them have started eliminating this fee. There are still a handful of cards that charge customers up to 3% when using their card abroad. To avoid this fee just make sure you are carrying a no foreign transaction fee card when traveling.

Finance Charges

Finance charges are not what most people think of when they thing of fees. However, in reality they are just that, a fee. Each month that you do not pay your statement in full you are charged interest on that balance. Depending on your credit score this amount could be as low as seven or eight percent or as high as 25 or 30 percent for anyone with poor credit.

Don’t charge more than you can pay off in a month and you won’t need to worry about this fee.

Late Payment Fee

Lastly, late payment fees are charged when you fail to pay the minimum balance by the assigned due date. This is a fee that can be easily avoided. Most credit card issuers now have a feature where you can auto pay the minimum balance or the balance in full. Set this up so you never need to worry about being late with a payment.

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