Mar 11th, 2008
Hidden Credit Card Fees and Costs- Credit Card’s sneaky secrets
Credit card week here at TPS has been fairly busy and so in my endless digging to defend you Ive come up with some extra things to watch out for. Your credit card is costing you money in ways you probably didn’t even realize. Thats right, that innocent little piece of plastic you’ve come to love (or hate) is actually hiding some secrets away.
1) Annual Fee
If there is an annual fee, make like a flock of seagulls and run far far away. The ONLY time this is acceptable is if the rewards program FAR outweighs the annual fee. This happens just about 0% of the time.
2) Rewards that really aren’t that rewarding
You finally saved up those 25,000 points to fly somewhere, awesome! Oh except you have to travel on certain dates….at certain times, and stay in certain places, oh and you have to book it a year in advance, oh and you can get bumped at any time….etc etc.
3) Cash advance fees
Never ever use your credit card to get a cash advance from an ATM. Card companies see these as loans. That means you’ll pay a 3% fee on the amount you withdraw, plus interest which starts accruing immediately. Interest rates on cash advances are generally ridiculously high. We are talking 10-30% kind of high. Thats a lot to pay just to get some cash out. Why on earth do you need cash that urgently anyway, and where the heck is your debit card?
4) Convenience checks are convenient for sucking you dry
Filling in convenience checks, which come with a lot of low-rate balance-transfer offers, is a terrible idea. These are treated as cash advances, and you may get smacked with a 3% fee, AND $5 to $10 minimum. As a sweet bonus not only do you get nailed if you use the checks, but card issuers will hit you with an average fee of $30 if the check is returned or stopped payment on. Even more awesome.
5) Lottery Tickets are treated as cash advances
Thats right , see #3 and don’t do it again!
6) Overseas? Get more Fees!
You will usually end up with 3% extra charged against you for “conversion” fees by both Visa/Mastercard and whoever the card issuer is. Ouch.
7) Pay by phone - More Fees
Paying by phone might cost you an extra $5-$20
Lose your statement? - More Fees
Thats another $15 probably. Unless of course you are using online banking (which you should be!)
9) Lose your card? - More fees
Theres another $20 most likely.
10) Late payment fee
This will cost you anywhere from $15-$25
11) Over limit uh oh fee
Go over your limit for even two seconds and you’re likely to get a nice $35 fee.
12) No balance at all fee
Thats right, you could get hit with a “Finance charge” for NOT having a balance. This is probably the most annoying of all credit card fees. Its small $2-$5 but it is absolutely BS.
13) Lack of use fee
This is rare anymore, but they may charge you for NOT using the card often enough.
14) Calculating interest from the time of purchase
Thats right, you could make a purchase, pay it off the next day and STILL get charged interest on the purchase.
15) Return Item Fees
You can be charged for returning an item you bought. Guess charging you interest on the day you bought it isn’t good enough, you need to pay a fee for returning it too.
- 8 Comments
- Credit Cards , Debt
None of my cards have an annual fee. I refuse to pay a fee just for the heck of it. That is what an annual fee is. If I don’t pay off the balance then by all means charge me interest. However, if I don’t use the card all year you still want a fee. Gimme a break.
One of my cards has points on it. As soon as I accumulate points I redeem them for something useful. Don’t want my points to be confiscated.
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Great list. FYI on #6 - Capital One cards have 0% transfer rates for foreign exchange.
Excellent webpage! Have it a thumbs up with stumble and I Digged It too! Very informative and helpful about credit!
On that same subject I’d want to tell everyone about a company called Credit Assistance Network (in Florida) that helped me improve my credit scores. They were great! They didn’t remove everything negative but they did remove most of it. Even more importantly they gave me excellent advice to help me build my credit scores.
The website is http://www.creditagenda.com or http://www.expert-credit-advice.com
They did such a great job that I promised them I would tell everyone about them. Tell them Jim from Ohio recommended them!