Do you have credit cards? Do you know exactly which fees you pay, and how much of your monthly payment is devoted to such fees? If not, you're in good company; too many of us don't know exactly what we're paying for when we make our monthly payments. And card companies have been accused of making credit card terms and conditions too complicated for the average card holder to understand. What's a consumer to do?
First, know what's out there. Fees come in the form of annual fees, late fees, penalties, fees for cash advances, fees for international purchases, and even fees for paying your bills over the phone. Fees are a slight nuisance to us, but they are big business for card issuers, who took in $25 billion in late and other fees in 2006. Yikes!
There are some steps you can take to reduce the amount of money you pay out in fees. First, sign up for a card that does not charge an annual fee. Never use a credit card to take out a cash advance at an ATM. Those cash advances incur an average 3% fee upon withdrawal, and begin to accrue interest right away. Some interest rates on cash advances can reach 25%! That's throwing money away.
Likewise, don't use convenience checks. They incur fees when used, and more fees if they get return or if you place a stop on them. Convenience checks and cash advances might have been no-brainers, but did you know that using your credit card to purchase money orders or lottery tickets can also bring fees? It's best to use cash or debit for those purchases.
International travelers will find foreign-transaction fees on their credit card statements, and to make matters worse, these fees aren't always accurate. Travelers abroad who purchased items with their credit cards early in 2006 are now entitled to refunds. (Visit www.ccfsettlement.com or contact your card company to see if you qualify for this refund.)
If you don't want to throw your money away on hidden fees, think about applying for one of the best low-fee credit cards. According to Kiplinger.Com, the best of the best are ranked thus: Simmons First National Bank (P), with a recent interest rate of 7.25% and a cash advance rate and fee of 11.25%/3%. This card has no annual fee, and a 25 day grace period. Late and over-limit payments are subject to $29 fees.
Next is the Capital One Platinum Prestige (P), with a recent interest rate of 7.9 and a cash advance rate and fee of 19.8%/3%. This credit card doesn't charge an annual fee, and carries a grace period of 25 days. Late payments and over-limit charges are subject to respective fees of $35 and $29.
Finally, we have the Pulaski Bank & Trust (G). It has a recent interest rate of 7.99. Cash advances come at a 7.99% rate and no additional fee. There is a $50 annual fee and a 25 day grace period. Late payments and over-charges will both garner a $29 fee.
How bad are credit card fees? They're not pretty, but you do have some control over the card you choose to carry. Remember, if you're uncertain about certain fees, call your card company and ask someone to explain them to you. That's what customer service is all about.
Most people only look for low interest credit cards when they are seeking a credit card. The credit card companies also advertise low interest credit cards considerably more that any other kind of credit card. Still, it is significant to ask yourself, when applying for a credit card, should a low interest credit card be the only card to shop for when searching for a credit card? In many cases, the low interest credit card is exactly what is needed, however, that is not true for all credit card seekers, although it still is a good plan to have a low interest card as a handy secondary financial tool for emergency purchases and cash advances.
Let us endeavor to know what is important about the APR (annual percentage rate). APR is the interest rate that credit card issuers use, to calculate the amount of money,they are going to bill you, for using your credit card and carrying an unpaid monthly balance. If you make purchases or a cash advance and owe money on your credit card at your monthly credit card bill due date; you will have to pay the credit card issuers a portion of the amount you borrowed, in purchases or cash advances, plus the interest which the card issuers have applied to your account. You pay no interest amount if you pay in full, your account's dollar balance, by the credit card acount's monthly due date.
So, as you can see, people who are not able to pay their full balance monthly, should seek a low interest credit card. By getting and using a low interest credit card, users of the card will save money by paying a decreased interest amount, over the time period that they carry a positive credit card balance. Saving money using a low interest credit card makes that kind of card important to people who intend to carry a monthly balance on their credit card.
There are other groups of people who don't really need a low interest card. These people pay their credit card bill in full every month. They mostly use a credit card for convenience and other card benefits, such as cash back, travel rewards, purchase discounts and so on. So,if it is a low interest credit card or high interest card it does not matter much to them.
The need for a low interest credit card is more important for people who intend to carry a monthly balance. Still those people should compare the various low interest credit cards to determine which card is the best to fulfill their financial needs.
There is a need to determine whether you need a low interest credit card or not. If you find that you do want or need a low interest credit card, make sure you choose the one that is right for you. Choosing the correct credit card today, may save you a great deal of money on future card purchases and cash advances.
Both Debbie Dragon & Angelknight 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.
Debbie Dragon has sinced written about articles on various topics from Finances, Credit Cards and Kitchen Home Improvement. Compare and find the best deal at CreditorWeb.com.. Debbie Dragon's top article generates over 165000 views. to your Favourites.
Angelknight has sinced written about articles on various topics from Credit Cards, American Express Card and Business Credit Cards. Art Taylor has been a successful internet marketer for 10 years. He writes articles about credit cards and other topics. For more information or to apply for credit cards visit his websites at:. Angelknight's top article generates over 9900 views. to your Favourites.