As you apply for credit cards, you’re going to realize they aren’t free and there are many fees that are attached to them. How many fees are included? Well, it depends on what type of credit card you apply for but I’m going to go through the basics to give you a better understanding of the fees so that you know what to look out for.
Annual fee- The annual fee is a fee that’s going to be tacked onto the credit card no matter how much you use it. This is a fee you’re going to have to pay annually. While most cards don’t have an annual fee, it’s important that you look out for this fee when applying for a card.
APR - Every card has an APR. This is your annual percentage rate and this rate will be applied to the balance that you don’t pay. Let’s say you have a $500 balance and you pay $250. That remaining $250 will have the interest applied to it. This is why it’s important to pay your bills off in full to avoid these charges.
Balance transfer fee - If you plan on making a balance transfer from one card to another, you may find that some credit card companies are going to charge you a fee. While many of them don’t, you’ll want to keep your eyes peeled if you plan on taking your cash from one card to another.
Cash advance fee – If you plan on getting cash from your credit card, you’re going to be look at some hefty charges. Almost all cards will allow you to get cash but not for free. Plan on pay at least 1-3% of the advance per cash transactions.
Late fees – Credit card companies aren’t going to let you get away with paying late. If you find yourself paying late, you’re going to pay a fee. This fee can be pretty big depending on the company. Most of the times you’re looking at anything over $20 and beyond.
Over limit fee - 99% of the credit cards out there will have a credit limit. If you have a limit of $5,000, make sure that you never go over that limit. If you do go over the limit, you’re going to see a charge. Most of the times, the card company won’t let you charge something if you have reached this limit but even if you go over a dollar, you can count on a charge on your next statement.
These are the main fees you’re going to encounter when it comes to credit cards. It’s very easy to avoid all of these fees and this is what I tell everyone. Always pay your bill off in full and on time and you won’t have any problems at all.
Related posts:
- Common Credit Mistakes
- How to Get A Credit Card Limit Increase
- Cash Back Limits
- Credit Card Rates and Disclosures
- What To Know About Credit Cards
