Are You Paying These Fees on Your Credit Cards?
05.17.09
You’re a savvy consumer. You know not to be taken in by offers of 0% interest rates, and you know your regular APR from your default APR. But do you know all the other stunts credit cards can try to pull? Before you fill out a new application, check to see whether it is on this list of credit cards to avoid.
• Credit cards bearing a yearly fee. Annual fees are a throwback to days when credit was hard to obtain and credit cards were the province of the rich. Nowadays, with every five and dime offering its own credit card, there’s no excuse for annual fees. If you find an excellent card and the only drawback is that it has an annual fee, call the issuer and ask whether they will waive the fee for you. Many issuers are happy to waive the fee in exchange for your custom.
• Credit cards that charge a fee to allow you to pay your bill over the phone or the Internet. These fees will soon be as obsolete as annual fees, but right now, many issuers still charge their tech friendly customers to pay electronically. If the card you want levies these fees, check to see whether only expedited payments carry a fee, or all payments are hit. If normal electronic payments don’t have a fee and only expedited payments (rush payments you make when there is no time to get any other form of payment in before the deadline) carry a fee, the card may still be a good deal. (Just keep an eye on your due dates.) If the card charges for all electronic payments, back away and go find a lender that’s a little more in tune with the times.
• Credit cards with monthly maintenance fees. Cards with these fees are designed for consumers with poor credit ratings who cannot qualify for any other cards. Worse, cards that charge monthly maintenance fees usually have low, low credit limits that quickly go toward the monthly fees, meaning that the lender is allowed to demand money from its customers while issuing almost nothing in credit in return. If your credit rating is in the dumps, avoid the temptation to improve it with one of these cards. Get together a small deposit and take out a secured credit card with a reputable lender. The credit limit on a secured card is the amount of the deposit you leave, and the credit line is backed by the deposit.
With a plethora of credit cards from reputable lenders on the market, even people with poor credit can find a credit card that does not charge exorbitant and unnecessary fees. Read the fine print carefully until you understand all the details, and call the issuer if you have questions. You deserve to have credit cards that do not charge you ridiculous extra fees.
Helpful info.
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These cards are aimed at consumers with credit ratings so bad that they have little to no chance of getting any other cards. To make matters even better, such cards usually have a credit limit so low that the fees quickly eat up the available balance. If your credit rating is in the dumps, avoid the temptation to improve it with one of these cards. Get together a small deposit and take out a secured credit card with a reputable lender. The credit limit on a secured card is the amount of the deposit you leave, and the credit line is backed by the deposit.
You cannot have a credit file unless you have some credit. Those trying to improve their credit histories struggle to do so, because more credit is needed to do it. That is not to say there are not plenty of credit cards for bad credit, but they come with a high cost in the form of high interest rates. Most are well above 30 percent and come with hefty fees. With such a high rate, a consumer who already has a less than perfect credit history can often fall into more debt and make his credit worse.
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That’s $750 in savings.
“If I could afford to pay extra, I would already have paid my credit card off!” you say. That’s reasonable. Most of us have more immediate financial concerns; the amount we pay each month matters more than the total amount we will eventually pay to clear the debt. To reduce the amount you need to pay each month, you need to reduce the amount of interest you’re paying by getting a lower interest rate.
Thanks to the Internet, filling out credit card applications is easier than ever. You simply complete and submit a secure online credit card application to the card issuer of your choice and wait for approval. Some issuers will even approve or decline your credit card application within minutes of submission. Nothing could be simpler.
The first thing to do is settle on the best credit card for your situation.
Applying for a credit card through retail stores, such as a small department store, is another way you can get around bad credit. Often these establishments are more liberal with accepting applications than bigger stores or credit card companies. In the event that you are approved, make sure that pay your balance on time and that you make only small purchases.
If you ask someone who you trust to cosign for a credit card as another option, make sure that they have a good credit record. This is one way to boost your ratings if you pay the minimum balance back every month.
Credit cards are a necessity for most people in this country. Everything from toll booth fees to library charges are put on credit cards. Many consumers use credit cards in lieu of paying cash or by check. Credit cards offer a safe and handy substitute for paying with hard cash. Often, instead of using credit cards as a representation of cash, consumers will use them buy things they cannot yet afford.