For many people, credit cards are often used in emergencies or for convenience. We often use credit cards to pay our bills and other expenses without ever using cash.
There are a lot of advantages in using credit cards as a mode of payment but you will also have to deal with some downsides. This can include a hefty amount of credit card fees and other charges.
If you want to understand your credit card fees, check out the guide below. You’ll also learn more about how to avoid unnecessary charges on your card.
Choose a Credit Card Without an Annual Fee
One of the many pain points when it comes to credit card fees is the annual fee. There are still so many credit cards that charge you with an annual fee but there are also others that don’t.
Many issuers charge an annual fee as a membership privilege that allows you to benefit from the perks and features of the card.
Whether you use the card or not, you will still be charged an annual fee.
The easiest way to avoid paying an annual fee is to choose a credit card that doesn’t have one but still has all the features and perks that you need.
Make Sure You Have a Good Credit Score Before Applying
Notice that your interest rate depends on many factors, but one of the major factors that affect how credit card issuers provide you with an interest rate is your credit score.
Your credit score depends on how well you can pay your debt and how trustworthy you are with your finances.
To prevent excessive interest rates, make sure that you have a good credit score before you apply for a credit card. This can help you save a lot of money on expenses like interest rates.
You should also pay your balance in full to avoid activating such fees on your statement.
Pay Your Bills on Time
There is a reason why many people often advise you to pay all of your credit card bills on time. Every time you miss paying your bill at the end of the month, you get charged a late payment fee, amongst many others.
Your credit score also suffers by the time you have paid your bill alongside the late payment fee.
There are a couple of ways to help you pay your bills on time. You can set up an automatic payment on your digital wallet so it will immediately pay your credit card bill.
You can also set up a notification to remind you that you need to pay your bill before the due date.
Avoid Foreign Transaction Fees
Foreign transaction fees are often charged to your account when you use your card abroad or if you’re making a purchase online when you’re in another country.
Many credit cards often have a percentage of the total amount as the foreign transaction fee, while others have a flat fee.
If you truly want to avoid getting charged this fee while still able to use the card overseas, look for a credit card that does not have any foreign transaction fee.
Most travel rewards credit cards don’t charge you with a foreign transaction fee.
Cash Advance Fees and How to Avoid It
There are a lot of people who use their credit cards to withdraw cash at an ATM. This can be very helpful if you’re looking to get some cash for emergencies.
Using your credit card to withdraw cash will cost you a flat fee for every withdrawal.
There are even instances that it will cost you a percentage of the total amount that you’ve withdrawn.
Taking out a cash advance on your credit card is quite expensive and unless it is extremely dire, you should rather get a personal loan that has fast approval than waste your money on cash advance fees.
Try Not to Go Over the Limit
Many credit cards charge you when you are over your credit limit. The good thing is that you won’t be charged an over-limit fee more than once every billing cycle, but that does not mean you should abuse it.
If you are not careful, you will still incur over-the-limit charges. The best way to avoid these fees is to avoid using your card for purchases that exceed your credit limit.
It is best that you request to increase your credit limit instead of going over the limit.
This can prove to be very expensive as many over-limit fees tend to be quite high.
Avoiding Balance Transfer Fees
A balance transfer credit card is often the best option when you want to consolidate all of your high-interest debt into a single card.
Most of the time, they charge you with a balance transfer fee so you can transfer from one card to another.
This adds an even greater burden to pay, knowing you’re already dealing with debt. However, there are a few credit cards that do not charge a balance transfer fee, so make good use of them.
You can also choose a card with an introductory period of several months and a 0% balance transfer fee.
Card Replacement Fees
Credit cards can be damaged or get lost and the only way for you to get them back is to have them replaced.
Certain credit card issuers provide you with a free card replacement but most of the time, they will charge you with a replacement.
There are also additional fees if you want to have the card replaced overnight. To avoid extra fees from replacing your credit card, try to avoid using your credit card by linking it to your digital wallet instead.
This way, you can still use the card without ever having to bring it with you.
Conclusion
We all want to save money from unnecessary expenses, and if you have a credit card, you know how expensive it can be to maintain one. Learning how to avoid unnecessary expenses with your credit card is key to staying within your monthly budget. Make sure to follow the essential guide above to avoid getting unnecessary charges.
