Most people do not give much thought to how much the use of credit
cards really costs. While you may think you are aware of the costs of
credit, there are many hidden fees and charges that often go unnoticed
by consumers until it is too late. If you do not keep a very close
watch on your credit card fees, you could end up paying hundreds of
dollars per years without evern realizing it. If you are trying to stay
within a budget, hidden credit card fees can be a real drain on your
finances.
Here are some of the most common types of credit card fees and what you can do to avoid them:
Your grace period may seem to be a period of time in which you can pay
your bill past the due date without accruing additional interest of
fees. While this may have been true in the past, credit card companies
are making it more difficult to pay your bill late without any extra
charges. In previos years, if you charged the maximum on your credit
card but were able to pay your balance in full before the end of the
grace period, it was like a loan extension that cost you no additional
money. The majority of credit card comanies have reduced the grace
period to less than 25 days and some have eliminated grace periods all
together. A purcahse you make at noon today will usually begin accruing
interest immediately. Check the fine print on your contract with the
credit card company. If you find that you have no grace period before
interest starts to build, consider switching to a more user-friendly
card.
Late fees can really add up. Make certain you know what the late fees
are for your credit card and under what circumstances you can be
charged. Late fees have increased dramatically over the past several
years. This fact combined with a reduction in your grace period means a
hefty profit for credit card companies. Whenever possible, send your
payment the very day you recieve your credit card statement. There are
several reasons to never make a late payment on your credit cards. The
most obvious reason is that you will avoid any late fees. Next, a late
payment can be reported to the major credit bureaus, leaving a bad mark
on your credit report. There is also the possibility that by making one
late payment, your interest rate can be raised permanently.
You may not be aware that even with a single late payment, your credit
card company can, and most likely will, increase your interest rate.
One late payment gives your credit card company the right to raise your
interest rate to the maximum allowed by law. This does not just apply
to your credit cards. Any late payments reported on your credit report
can give all your lenders the right to raise your interest rates. A
late payment means higher risk to a lender and you may find that
several of your interest rates go up due to a pate payment listed on
your credit report.
Keeping your interest rates low and avoiding hidden charges and fees is
the best way to save money over the long-term when it comes to your
credit cards. Managing your credit is one of the most important factors
in your overall finaincial stability. Make sure you understand
completely the terms and conditions of your credit cards and all other
credit accounts you may have such as your car loan, mortgage, and any
other revolving accounts. By making your payments on time, you will
save hundreds or more dollars each year in interst and other fees.
