Each month, when you get your credit card bill, you promptly check and pay off the full outstanding amount well ahead of the payment due date. Good for you! But, does your bank or credit card company gaze upon you with a benevolent and benign eye? The answer is, “maybe”, no doubt you’re a good risk, but are you a profitable customer for the bank? Not at all, because the bank doesn’t make any income from you – no interest, no late fee, no penalties! The lesson here for everyone, is that if you use your credit card smartly, you too can avoid high credit card fees; this article tells you how…
- Look for a card which has no annual and joining fees; many banks and credit card companies no longer bill customers annual fees as the market gets more sophisticated and competition for ‘share of wallet’ is fierce.
- Read the terms and conditions for usage carefully; a schedule of fees charged by the bank or credit card company is usually sent along with your credit card, else you can call the service line or visit the company web site to get a complete schedule.
Watch out for the following kinds of fees charged to your credit card account:
- Late fees – when you make a payment after the due date has passed; check beforehand how the bank or company defines the due date – some credit your account upon receipt of your payment, others may wait until cleared funds are obtained. If the latter method is used, then even if you mail your check on the mentioned due date or a day before, but cleared funds are received only after this date, you will get charged late fees;
- Late payment fees – when you pay less than the minimum amount due (MAD), which is usually 5% of the total outstanding, or miss the payment entirely;
- Overlimit fees – when your total outstanding exceeds your credit limit;
- Fees for making payments through methods other than check payments, for example, using online payment services or having your check or cash picked up in person on the due date, because you missed making it earlier;
- Transaction fees on certain types of transactions or certain outlets, such as cash advances on the credit card, or at a merchant outlet that is not signed up with your credit card provider to process payments, or fees for a balance transfer.
If you are otherwise a prompt payer, but miss out on a payment due date, call up the bank or credit card company and request for a waiver. Most providers will do this as a customer service gesture for good customers. Another way to avoid high credit card fees is to get your payment due date changed to a date where your funds are available, for example, your salary is credited to your account around the 10th of the month, but your payment due date is the 1st. These are some of the ways in which you can avoid paying high credit card fees.