Credit cards aren’t exactly known for their transparency. Many people have found themselves in over their heads in credit card debt when they realized that in addition to the high interest rates, there are often also finance charges, annual fees or penalties for foreign purchases.
The easy solution is obviously to not get involved with credit cards in the first place. But in the world that we live in, credit is almost certainly required to make big purchases. Not only that, but when used for their intended purpose, helping you out of a tough financial spot, credit cards can be great. If you’re looking for a small, temporary loan in an emergency, consider looking into a payday loan from a servicer like Wonga.com with clear repayment terms. But if you’re sure you’re in the market for a credit card, keep these hidden fees in mind and choose a card that’s got the most to offer you.
Of course the biggest unnecessary fee you’ll find hidden in your terms and conditions is an annual fee. There are plenty of credit cards out there that don’t require fees like this so if you find yourself with one that does, you can be sure there’s a better deal out there. Annual fees are especially unnecessary for users that rarely use their cards, racking up a fee when you’re hardly using the product.
Another fee that’s been popping up is the paper statement fee, a fee charged to customers who choose to receive statements via the postal service rather than online. Perhaps you enjoy receiving the paper statements and keeping them for your records. But unfortunately a lot of times people don’t realize they’re even receiving a fee, even those who would be willing to make the change to online statements. Paper statement fees are usually very small and aren’t necessarily obvious on your bill. Banks have resorted to paper statement fees as incentive to get the consumer to switch to a method that costs them less but then sneakily passes the charges on to you.
If you’re someone who travels out of the country frequently, also beware of foreign transaction fees. These fees are by no means new, but even the 2 to 3 percent that they charge can add up quickly if you’re someone who’s always on the move. Not all credit cards charge these fees, so if you’re a traveler, search for a card that offers free foreign transactions and save yourself the money you deserve.
And of course if you can find a credit card that offers you incentives like airline miles without the rest of the fees you’re likely to see, take advantage. But read the fine print before you think, ‘Gee, this free mileage thing is pretty neat.’ Credit card companies have taken to charging reward redemption fees, small amounts that cover the administrative costs it takes to redeem whatever rewards you may have earned. It’s not much of a reward if you just end up paying the value of your rewards in extra costs.
Try visiting websites like www.moneysupermarket.com where you can easily compare interest rates, fees and reward systems.