The term "credit card fees" refers to any fixed costs linked with using a specific credit card. This differs from interest costs, which are only incurred when a balance is carried over from one period to the next. The annual cost of owning a credit card, the balance transfer fee charged when you move another debt to your card, and the foreign transaction fee assessed when you purchase outside the country are typical of credit card fees.
How to Stay Away From Exorbitant credit card charges
- Costs Relating to Finances
Credit card issuers will charge you interest, commonly known as an annual percentage rate if you carry debt from one billing cycle to the next on a credit card (APR). Your creditworthiness and the interest rate range given by that specific credit card are two primary considerations determining your credit card's annual percentage rate (APR).
You may easily avoid paying any interest or credit card charges if you pay off your debt in full and on schedule each month. You are entitled to get something that is known as a grace period with credit cards. This refers to the amount of time that extends from the conclusion of your billing cycle to the date on which the payment on your balance is due.
- Charges Applicable to Foreign Transactions
When you make a purchase using a currency other than the one your credit card is denominated in, such as when travelling to a different nation or shopping online from another country, certain credit cards charges you a foreign transaction fee. The amount that this charge constitutes is usually between 1% and 3% of the total amount you are spending.
Choose a credit card that doesn't charge fees for using it in other countries. Several travel credit cards do not charge you for this cost.
- Fees for Cash Advances
A cash advance fee will most likely be assessed to your account if you use your credit card to withdraw cash from an ATM over your available credit limit. This might be a set rate for each withdrawal, a percentage of the amount you're withdrawing, or both.
Getting money via your credit card by taking out a cash advance is an exceedingly costly method of receiving money. Consider getting a personal loan, which can have lower interest rates, or borrowing money from relatives or friends if you need the cash quickly.
- Charges for Returned Payments
When you make a payment towards the amount on your card and that payment is returned because there are insufficient funds, you will be charged a returned payment fee. The maximum amount that may be charged to your card as a return payment fee varies according to the card's issuer and state legislation; nonetheless, this amount is often between $20 and $40.
Having a chequebook that is balanced may assist you in determining whether or not you have sufficient funds in your account to handle the credit card charges due on your credit card. Make sure you are aware of any pending transactions that may still need to be cleared to avoid being penalized with a returned payment fee from the issuer inadvertently. Be aware that there is a possibility that, in addition to returning your payment, your bank may also charge you a fee for having insufficient cash.
Also Read - 5 Best Ways To Use Your International Card
