Credit Card Fees and Mistakes That Can Cost You a Lot If you’re the type of person who doesn’t run a careful check of his or her monthly credit card statement, then you may be among those cardholders who are incurring fees without noticing it. As if credit cards are not expensive enough, there are still other fees that are charged in certain cases. As responsible card holders, we should be aware of these fees to be able to avoid getting surprised (read: shocked) as our eyes set upon the lines that read: total amount due.

Here are some of the credit card charges we should be careful with: Foreign exchange fee Not all cards are created the same. Some fee-hungry cards will charge you foreign exchange conversion fees, usually 2-3% for Visa and MasterCard, when you are purchasing something that is sold in a different currency than your card provides. Of course, there are credit cards that do not charge foreign exchange fees at all. If you travel a lot, or perhaps often buy materials from abroad or online, then you should probably get a card that has no currency conversion fee, or one that allows you to waive those fees.

Balance transfer fee Sometimes, it makes sense to transfer balances especially if the card you’re transferring to has 0% introductory rate. However, balance transfer fees can be as high as 3-5%, and depending on your principal, this could cost a lot. Some cards may offer 0% transfer fees for the first few months then charge you with high fees. If you balance transfer a lot as a way of juggling your bills, then you could be accumulating a good deal of fees. Annual membership fee Annual fees are a given when you sign up for a credit card and we usually take them for granted because they’re relatively small. But look, $60 annual fee is still a huge savings especially if you’re carrying a balance. Many credit card companies will actually waive your annual membership fee if you asked them to. Late payment fee Aside from your interest charges during nonpayment of balance, credit cards also charge you a late payment fee. This is imposed when your payment is received after the due date, even when it’s just an hour late! Late fees depend on your credit card provider. Some would collect tiered fees based on your balances, while others have fixed fees. The Credit CARD Act of 2009 has capped the late fees that credit card companies can charge, ranging from $25 to $35. So, if you fail to pay these fees, they won’t go away. They will simply appear on your next credit card statement, together with another set of finance charges and late fees. Automated payments Some people have had horrible experiences with automated bill payments in their card cards. They schedule an auto payment with, say, a utility bill such as cable. They unsubscribe from the service but totally forget that they have made auto payment arrangements, continually racking up bills when there shouldn’t be any. It’s possible to reverse the fees but it will be time

consuming on your part or frustrating that you would simply give up and pay up. Premium subscriptions If you frequently lurk online, you may have encountered subscription services such as online magazines or premium social media accounts that offer free accounts. Usually, they will require you to enter your payment details, and in exchange, offer you their services for free for the first month. And if you do not cancel before your free trial period ends, they will take it to mean that you want to continue your subscription–this time for a premium rate. Oftentimes, many people forget to unsubscribe and they are billed automatically each month. Not paying off gas cards A new survey conducted by CreditCards.com has found out that gas station-branded credit cards charge the highest interest rates, i.e. 24% on average. Most credit cards charge an average of 15% and even most store cards only charge 23%. Instead of getting gas cards, you might just find a better deal with a normal credit card with cash back rewards on gas purchases. Remember that credit cards make profit by charging fees from the money they “lend” you through your card. The card is indeed a convenient facility but there’s no such thing as free lunch. The convenience comes with danger, which can only be avoided when you are aware what’s going on inside your credit card statement.