4 Credit Card Fees You Should Always Avoid

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If you don’t like throwing money away, do your best to avoid these charges.

Credit card companies don’t just make money by charging interest on balances that aren’t paid in full. They also make money by imposing various fees on cardholders. No matter how many credit cards you have, here are four fees to avoid.

1. Late Payment Fees

Late payment fees apply if you do not make your minimum payment by your invoice due date. Do you want to avoid these fees? Don’t be late with your payments. Set a calendar reminder so you don’t forget when your minimum payments need to be submitted. Also, pay attention to the fees they charge during the month so you don’t get into a situation where you default on your minimum payment because you don’t have the money.

Believe it or not, a single late payment can damage your credit score. The lower your score, the fewer opportunities you have to borrow money if you need it. So it’s worth not being late.

2. Cash Advance Fees

Many credit cards give account holders access to cash—but at a cost. Cash advances usually incur a fee, which can easily be 5% of the amount withdrawn. If you receive a $1,000 cash advance, it may mean paying an additional $50 to receive that money.

If you need cash in a pinch, consider getting a personal loan instead. One downside to personal loans is that they usually have a minimum borrowing requirement. If you only need to borrow a few hundred dollars, a personal loan may not make sense. But it does pay to explore your options outside of a cash advance from your credit card due to high fees involved.

3. Annual fees that do not amortize

Annual fees aren’t always a bad idea. However, annual fees that do not pay off are a waste of money and should be avoided. If you have an annual fee credit card and that card doesn’t give you more airline miles, cashback, or benefits than a fee-free card, then it’s worth ditching that card.

Also, find out about the benefits before signing up for an annual fee card. And make sure you’re likely to harvest them. A card that offers a lot of cashback for travel might not be a good choice for you if you don’t travel a lot. In that case, you could end up paying an annual fee for no good reason.

4. Foreign Transaction Fees

Some credit cards charge you for swiping your card abroad. And it’s not uncommon for international transaction fees to hover around 3%, which can get expensive if you spend a lot of time abroad and use your credit card a lot. Many travel credit cards have no international transaction fees. So do your research, especially if you intend to travel a lot.

Credit card fees are not always unavoidable. Do your best to avoid the above fees so you can pocket more of your hard-earned cash for yourself.

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