Friday, 28 August 2009 10:07
Credit Cards are notorious for charging hidden fees, but what should you be looking for to avoid them? Here are some fees to be on the look-out for.
You’ve seen these offers in the mail that are too good to be true, a low interest rate or even 0%. Make sure to read the fine print, typically the teaser rate will only last a few months and then increase to the standard rate that is significantly higher.
Balance Transfer Fees
Credit cards also offer a very low or 0% rate on transferring the balance of one of your other cards. This may actually be a good deal if you are able to pay off the balance before the rate adjusts and don’t make any new purchases on the card. However, the balance transfer may come with a fee, a time limit, and possibly even another higher rate on new charges, so be sure to read the fine print.
Know the specific terms on your card. Your interest rate may increase to over 30%. One hidden cost that is largely out of your control is an interest rate increase that happens across the board. Banks may occasionally increase their standard interest rates with little or no warning. If you are in good standing, asking for a rate decrease sometimes will work; it can’t hurt to ask.
It is important to always pay on time or you can be charged a late fee of $15 to $39, plus your credit score will suffer. Also, there are other fees on top of the late charge as well. If you're already close to your credit limit, a late fee can push you over the top — and then the bank may charge you a comparable over-the-limit fee. They can also increase your interest rate for late fees.
The most important thing is to make sure you know and understand the fine print, which can be difficult.