Convenient or Costly? Evaluating Credit Cards Hidden Fees

Convenient or Costly? Evaluating Credit Cards Hidden Fees

by Nick Makaryk

A credit card is something which is carried by most people these days, being that there are the most convenient form of paying for goods and services. For many cardholders, they are also the most expensive way to pay; whether they realize it or not - and in all too many cases, they do not.

This article will reveal to you the hidden fees which you are paying to your issuing card company. Many people do not even notice these fees, but they can add up to hundreds of dollars annually. Many of these fees can be avoided if you know what to watch out for and you can then save this money.

One such hidden cost is the cost associated with going over the grace period. Grace periods used to be 30 days - if you paid off your balance in this time, you would pay no interest on your balance. However, this period has been growing shorter and shorter.

Banks and other card issuers have reduced this grace period to as little as 20 days. If you're still depending on the standard 30 day grace period, you are probably losing a lot of money to interest payments without even thinking about it. Some companies have even done away with the grace period entirely - meaning that you begin paying interest the second that you use your card!

Always read the small print on your agreement to find how long of a grace period you are allowed. If it is too short for your needs, you might want to cancel that card and find one which offers you more favorable terms.

Another source of fees is the late fee. You should always know how much your credit card company will charge in late fees. Late fees plus a short grace period means a surprising amount of money which you are being charged - but this cost is avoidable.

You should get into the habit of either paying via electronic money transfer or sending a check the same day that your credit card bill arrives. If you fail to do this, you could end up paying a lot in late fees and interest. Also, delays in payment will appear on your credit report, making you a less attractive customer to lenders. This goes for any late payment; the card company can even raise your rates for late payment, so be sure to always pay promptly - it will save you a lot of money.Once you know what these fees are, you will be attentive to taking the necessary actions to avoid them. If you keep a record of how much money you save in this way, you are likely to find that you have saved a substantial amount by the end of the year.