Make sure your credit cards are paying YOU and not the other way around. In order to max profits, many credit card companies have a long list of fees they can charge you to use their card. Avoid these fees as much as possible, and instead opt for rewards cards that pay you instead.
Shop around for your credit card like any other purchase. There are even vast differences between cards issued by the same company. Make sure you ask the right questions and understand completely the fees and rewards programs offered.
The following are some common fees and ways to avoid them.
Annual Fee: So many cards these days come without the annual fee you should just keep shopping until you find one with no fee. Even if the annual fee earns you a reward, you are often better to skip the fee and get a reduced reward.
Minimum Finance Charge: Hopefully you pay off your balance each month, but if you don’t and your balance is low a minimum finance charge can kick in. Some cards even charge you a minimum finance charge if you do pay off your balance each month! Make sure to read the fine print.
Cash Advance Fees: There are so many better ways to come up with cash than your credit card cash advance or checks. Between the fees and daily finance charge, this quick cash can cost you an arm and a leg.
Late Fees: I was shocked to see a late fee on my credit card statement last year when I was only two days late. $30 for two days late (only late because I thought I had mailed it and found it in my purse later). Make sure you understand the exact structure of your late fees on your cards before they end up costing you!
There are many more creative fees credit card companies use to rob you of your money. The key is to read the terms and conditions of your credit card contract so you aren’t caught in a money pit.
Related Articles: