Nov 30, 2017

You have finally chosen a credit card provider and you will be soon signing on that dotted line at the end of the fine print. Before you sign off, make sure you are thorough, because that fine print will definitely have some minor details that could help you understand any hidden charges that will be imposed on your credit card.

Charges that Come With Late Payment

When we are planning to apply for a credit card, we all make a resolution of not being late with our monthly payments. But how often do we stick to it? At times, the problem may lie with us but credit companies also exploit their customers. When it comes to  late payments, it’s not only the day that is the deciding factor, but also the time of day.  If you turn out to be a defaulter for not following the rigid specifics, then you  may be held accountable for a late charge.

 If you think you can manage  to ignore the late payment fees, chances are that credit card providers may compensate it by increasing your APR.   Keep in mind that they  are required to inform you fifteen days in advance

Insurance Charges

Credit card companies also charge in insurance premiums, in case you lose your credit card and they have to provide a replacement. As per the Credit Card Accountability, Responsibility and Disclosure Act of 2009, the limit has been set at $50

Transferring Your Balance

People often tend to transfer remaining balances on their existing credit cards to newer ones. People choose to do so for different reasons like replacing your existing card with a low interest  one. Although this sounds like you are getting a better deal, what you don’t know is that your provider may  add a transfer fee, which is usually 3-5 percent of the balance that is being transferred.  There may be providers that offer a fixed fee.

Dormancy Costs!

If you think you can manage with your credit card by totally avoiding it, then you are wrong.   If you leave your credit card inactive over a defined period, credit card companies charge you with an inactivity fee.

Blocking Your Advances

Cash advance may seem a convenient way to address an emergency but it also comes with a cost. Credit card companies charge you  2-4 percent of the amount you are withdrawing, while others would prefer a fixed cash advance charge.

Offshore Transactions

Offshore transactions may include a purchase on a holiday trip to France or it could be an online transaction made at a store, located on foreign soil.  The truth is, we tend to use our credit cards in such situations for convenience. However, it would be better to know that credit card companies do charge for such transactions, especially if it involves currency conversion.

The Closing Signature

Many people don’t know this but you also have to sign off a check when you are closing a credit card account with your current provider. In other words, customers are required to pay a closure fee that can add to a total of $50.

Credit cards provide us with convenience along with many benefits. But it is always advisable to read the fine print before committing. 

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