Credit cards have always come to your rescue when you are low on cash. It helps you to track your expenses as well saves you the time and trouble. Every valued customer get some perks from frequent flier miles to discounts on automobiles. Controlled use of a credit card can help you establish credit for the first time or rebuild credit if you’ve had problems in the past–as long as you pay your bills on time. Agreed that credit cards have various benefits. But did you know that credit cards also have various unhidden costs which the credit card companies don’t tell you about?
Every credit card company makes you sign an agreement of terms and conditions before you accept a credit card. If you fail to read these terms and conditions, it will cost you a lot of money. Many of the terms and conditions contain information on the range of APR’s rather than telling you the actual rate. We bring you a list of the unusual fees that you have to pay when you take a credit card and also how you can avoid them.
1. Credit Limit Increase Fees
If you feel your spending is more and increased your credit limit, then be ready to shell out an extra fee. Take First Premier’s terms and conditions as an example. It states that ,’Each time your credit account is eligible for and approved for an unsecured credit limit increase, a credit limit increase fee in the amount of 25 percent of the amount of the credit limit increase will be assessed to your credit account.’ Now this is a cost that they didn’t tell you about. So beware.
2. Pay-By-Phone Fees
If you generally pay your credit card bills, through your phone, you may want to think twice. Nearly 1 out of every 10 credit cards charge this fee, which can vary from $10 to $15. You can avoid this fee by paying online or sending a check instead. Easy.
3. Paper Statement Copy Fees
If you want a Paper Statement Copy, be ready to pay a bit. The cost however depends on how old the statement is. Some cards charge the fee only if the requested statement is 13 months or more old. Others charge a small fee for statements less than 25 months old and a slightly larger fee for those that are older.
This fee may sometimes be unavoidable. If you need the statement and don’t have any other option, you will have to pay it. You can however ask the issuer if they’d waive that fee for you. If you’ve been a good customer, they just might do it.
4. Inactivity fees
Some cards charge a fee if you don’t use the card for a certain period of time or fail to reach a set annual spending limit. Some cards waive annual or inactivity fees for the first year, then implement them every year after that. Hence, it is very important to read the terms and conditions to understand the terms of any minimum purchasing amounts or fees associated with card inactivity.
5. Closure fee
Even if you want to close your account, credit card issuers may charge you a fee. If there is a closure fee, call the customer service line to see if you can negotiate it down or eliminate it. You should also consider whether closing a credit card is in your best interest. You can even keep your account open and not use it. However, this again depends on the credit cards company’s T&C.
6. Overseas fees
A foreign currency conversion fee is charged by Visa and MasterCard to convert transactions into U.S. dollars when you’re shopping overseas. A foreign transaction fee, on the other hand, is technically a charge from the issuer for handling a transaction outside the U.S. You can avoid this fee by doing a little comparison shopping. Anyone who travels regularly or spends much in foreign currency should investigate a zero-fee card.