Getting hit with credit card fees is no fun, especially if you’ve been doing your best to avoid them. Talk about frustrating!
If this sounds familiar, take a look at the details below – the Nerds have some tips for shaking 5 common credit card fees.
1. Late fees
If late fees are a scourge you can’t seem to avoid, it’s time to get serious about setting up reminders to pay your bill by its due date. There are a few ways you can go about this:
- Sign up for text or email alerts with your credit card issuer; usually, you can arrange to have a message sent when your bill comes out and when it’s due.
- Set calendar alerts in your smartphone.
- Write your credit card bill’s due dates in your planner or paper calendar.
If you’re really forgetful, it might be wise to use all three of the strategies above.
Also remember that most credit card issuers will allow you to change your billing cycle so that your payment due date comes at a time of month that’s convenient for you. If the reason you’re paying late is because your billing date doesn’t coincide with your paycheck schedule, shifting things around might be a good option.
If all else fails, you could also switch to a card that doesn’t charge late fees.
2. Foreign transaction fees
If you frequently travel abroad or shop online at overseas retailers, you might be racking up big bucks in foreign transaction fees. If you’re not familiar with how foreign transaction fees work, it goes something like this: When you make a purchase with your card at a non-U.S. merchant, your credit card issuer charges a fee, usually 3% of the price of the item. That might not sound like much, but it can really add up over time.
Luckily, there are a lot of credit cards out there that don’t charge foreign transaction fees. Consequently, the easiest way to dodge this fee is to apply for a card that waives the fee and use it whenever you’re making a purchase from a retailer that’s not based in the United States.
3. Cash advance fees
If you’re regularly using your credit card to access cash, you’re likely getting hit with hefty cash advance fees. Most issuers charge 2%-5% of the advance in the form of fees, which certainly isn’t chump change if you’re in the bad habit of tapping your card for dough.
The best thing to do to avoid cash advance fees is to use your debit card when you need cash. Even if you use it at an out-of-network ATM, the fees are usually much lower than they would be with a cash advance from your credit card.
If you’re avoiding using debit because your checking account is running dry, it might be time to reevaluate how you’re managing your money. Taking a cash advance from your credit card should be a last resort in an extreme emergency; if you’re using them regularly, go back to your budget to figure out what’s going on.
4. Annual fees
Sometimes people sign on to a credit card that charges an annual fee without realizing they’ve done so. If you find yourself in this situation and are uncomfortable with the fee, you have a few options. You can try to get in touch with your issuer to see if they’ll convert you to another, annual-fee-free version of the card you have. This is a good idea if you’re generally happy with the card, but don’t want to pay a yearly charge to keep it open.
Another alternative is to close the card that’s charging the annual fee and open a new card that doesn’t. Be careful, though — this move could ding your credit score. If you decide to go this route, be sure to follow the proper steps for closing a card.
5. Overlimit fees
Overlimit fees are charged when you exceed your credit limit. According to the CARD Act, issuers aren’t permitted to automatically let you go over your limit and charge you this fee; you have to opt in to be allowed to exceed your credit line. If you’re getting hit with overlimit fees, it’s time to get in touch with your credit card company to see what’s going on. If you accidentally opted in, let them know that this was a mistake and take steps to have it corrected.
But also keep in mind that if you’re habitually maxing out your card you’re probably doing damage to your credit score. Try to keep from exceeding 30% of your available credit, if possible.
The bottom line: Credit card fees are a nuisance, so use the Nerds’ tips above to avoid them!
Empty wallet image via Shutterstock
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