Article: Credit Card Hidden Cost
Credit Card Hidden Cost
If you are not a very experienced user of credit cards, you may very easily fall for too- good- to- be true offers, which will actually cost you more than you think. It is advisable to compare credit cards and read reviews before you decide to get a new one, get informed before stepping into a trap. For example, you see a perfectly nice offer of a credit card which offers you 0%APR for six months, fixed rates and a nice sum as balance. You certainly wish to apply for it as quick as you can, you don’t want to miss a chance like this. But what you have definitely missed is to read the fine print thoroughly, which might say that: the fixed rates may become variable at any time with a two weeks notice, or if you step over your balance even with the slightest amount the interest rates they charge will hit the ceiling. If so, making your own calculations, in the end you will pay way more than what is displayed in the offer. Offers are being presented to sound as attractive as possible, because they want new clients, so extra higher charges and interest rate related regulations will be displayed on the fine print in very fine small, almost imperceptible to the human eye letters. This is on purpose so that you will avoid reading that part, but if you wake up one day with a huge interest charged on your balance, they will show you the place on the fine print where interest rate related issues are displayed indeed, you just missed to read them.
Among the most important aspects of a credit card which actually carries the most hidden fees, is the aspect related to the interest rates charged. For example, if you choose a very good offer with a low APR charged they might charge you an unusually high annual fee or the rates will be most probably variable. On the other hand, a higher APR may not charge you annual fees, the rates will be fixed, but penalty fees will be definitely very high. So, it is not good to stay at the extremes, and try to choose credit cards which come with reasonable costs: don’t ask for very high credit amounts, choose a middle interest rate like between 10.99%-13.99%, check to see their penalty fees are not too high, and that the rates will be fixed.
Even if the mentioned amounts they require for a late penalty fee or for not carrying a balance on the card, or the fee for ATM withdrawals are very small, adding all these up will give a pretty nice sum you wouldn’t wish to pay for. In order to stay away from credit card “catches”, or hidden fees, you should always:
- Check your monthly balance and keep track of each transaction you have made along with the dates of purchase; whenever you observe something “out of place”, report it
- Pay the balance each month due date; this way you will avoid the interest applicable hidden fees and charges
- Stay with your payments on time so that you will pay the same interest all throughout, otherwise the lender might raise your interest.
- Moreover, by staying with payments on time, you can build yourself a nice credit history/record Late fees can equal as much as $40, a simple annual fee can be even $50, with each day that passes without payment you may be charged 2% of the total owed per day, finance charges when you don’t even carry a balance can reach $5-$10, so you make your own conclusions and act consequently.
You can actually stay away from hidden fees if you know them, in the first place. That is why it is so important to read through the whole documentation which comes together with a credit card offer. This way, if you know you will be charged $39 penalty fee for being late with your payment, you will make anything possible not to stay behind with your payments. And this goes for every hidden fee, however small it is, because only like this, will you be able to stay clean and organized with your credit card.
Start today with Our Free Debt Management Software and have the life that you always dreamed of.
