All credit cards have hidden fees. Financial institutions issue the cards to make money. Money is made on both sides of the transaction. The merchant pays a per sale fee and a percentage of the total sale as well as a monthly service fee. And of course the consumer pays fees as well. These hidden fees alone add up to millions of dollars each year. Some of them include:
Cash advance fees. There are very few credit cards that don't charge for obtaining cash from an ATM. In reality, these cash advances are considered loans. So, not only do you pay a fee for withdrawing the money but you are charged interest from that moment on. Rates vary, but typically range from 3% to 24%. Your payment usually goes to pay off the balance first before any cash advance is paid back. And that's because the interest rate on cash advances is normally higher than that on merchandise and services purchases.
Pay-by-phone fees. If you usually pay your bills by phone, you may be charged a convenience fee, by your credit card company. Some credit card companies charge an even larger fee if you are paying your bill on the actual due date.
International fees. If you travel abroad and use your credit card, chances are you will be charged an international or foreign transaction fee. The only good news is that this fee is typically lower (1% - 3%) compared to other fees.
Late fees. Don't assume that if you get your payment to the credit card company on the due date that it will be processed that day. Late fees are regularly assessed on payments that were received on time, that way you are not reported for a late payment, but that the company processes the next day or so, that way they can charge the late fee. Check your bill because the due date can change without notice.
Convenience check fees. If you use the convenience checks that are usually included as a perk with many major credit cards, you are probably in for a big surprise. These checks are considered another form of cash advance, so there are fees attached to using them.
Worse yet, in the event that the check is returned because your available credit balance won't cover the amount of the check, you will be charged additional fees, as well.
Look closely at the terms and conditions your credit card company offers and make sure you understand the fee structures so you don't get caught paying extra money.
Credit Card International Fee
Did you know that some credit card companies purposely send their customer bills out so late in the billing cycle that you would literally have to submit payment the day the bill arrives in order to have any chance at getting the payment in on time? It's a tactic that many of the companies use to increase the amount of money they earn off their customers on the late fees.
You can avoid paying unnecessary late fees in a variety of ways. Don't credit card companies make enough on you off the interest rates? Check your statement carefully each month to ensure that you're not being charged late fees, even if you're confident you're mailing your payments out on time.
Make Your Payments Online
Almost every credit card company gives you the ability to make payments online. This will save you extensive time. Considering the fact that an envelope sent through regular postal mail can take two to three days in transport, and then another five to seven days to be processed (and have the payment applied to your account) by your credit card company- it's a wonder any payment makes it to your account on time! Making a payment online is typically processed within 1 business day of hitting ?Submit?, sometimes sooner.
Schedule Automatic Payments With Automatic Bank Withdrawals
Additionally, you can often set your account up to automatically get paid through your checking account on a specified date each month. If your credit card company doesn't offer it, your banking institution might have a bill pay feature you can use. Just select a date a few days before the bill is due, and let the credit card company draft your checking account for the payment. You will never have your payment applied after the due date and therefore eliminate all potential late fees.
Have it Ready to Go!
If you aren't comfortable with making payments online, and you don't like the idea of giving your credit card company access to your checking account to ?pay themselves?; you can still beat the system and play the credit card game in order to avoid late fees. You know how much your minimum payment is each month and that it's typically do the same day each month. Have your check or money order ready to mail out, or get in the habit of writing it out the moment you receive your statement. Make sure the payment is mailed out the very next day and you should never receive a late payment.
How to Handle the Dreaded Late Fees
If you do happen to get a late fee, often if you call and request them to waive it for you, they will (provided you don't make a habit of it). They will probably remind you to mail your payment out at least 10 days before it is due because of the postal time and then the company's own processing time- so be sure to tell them you mailed it out well in advance of the due date.
If you honestly feel that you are giving your payments enough time to get to the company and you are still receiving late fees on your account, you might consider mailing your statement with a return receipt or certified mail. This way, you'll have a record of when it was mailed and when it was received and that can serve as your ?alibi? and save you from having to pay a late fee (or give you leverage to having a late fee removed if one should be added!)
Both Dee Power & Debbie Dragon are contributors for EditorialToday. The above articles have been edited for relevancy and timeliness. All write-ups, reviews, tips and guides published by EditorialToday.com and its partners or affiliates are for informational purposes only. They should not be used for any legal or any other type of advice. We do not endorse any author, contributor, writer or article posted by our team.
Dee Power has sinced written about articles on various topics from Credit Cards, Sales and Negotiation and Business Plan. Dee Power is the author of several nonfiction books, including the novel . More tips on. Dee Power's top article generates over 450000 views. to your Favourites.
Debbie Dragon has sinced written about articles on various topics from Finances, Credit Cards and Kitchen Home Improvement. This article is courtesy of Creditorweb.com, where you can compare credit card offers including and. Debbie Dragon's top article generates over 165000 views. to your Favourites.
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