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How To Avoid Credit Card Fees
By William Ember
1. Don't exceed your credit limit. It almost goes without saying and yet some people don't realize it can happen because it is a 'limit' after all. Pending purchases (not instant), periodical charges, interest charges and cash out can take a card 'over-limit'. Simply put, an over-limit fee is you wasting your money for no good reason (besides being inconvenient.) Better to keep a running total in a small notebook or something like that.
2. Don't miss a payment due date. This is also throwing money away and in most cases completely avoidable. Even if you donnt have enough money for the minimum payment, there are things you can do:
a) do a balance transfer onto another card for at least the minimum payment amount. This counts as a bill payment.
b) buy something with the card (or another card) that you would have bought with cash anyway, and use the cash to pay the bill (providing you have available credit.)
c) as an emergency resort, you can get the 'cash out' equivalent of your minimum payment amount and use it to pay the bill (making sure not to go over-limit of course.)A little ridiculous, but the cash out fee is likely to be less than a late fee. Think ahead next month!
d) ring your card provider and ask for an extension. I've never had to do this because of the methods I use, so I don't really know about it sorry.
3. Never get 'cash out' (except in c above.) Besides the fact that interest on cash out is much higher than purchases, there's a cash out fees on top (about 2-3% + a small surcharge.) With so few places these days that don't take credit cards for purchases, a heap of spare cash is rarely necessary. Of course it's good to have some 'petty cash' set aside for these places, such as some butchers, vege stores, vendors, coffee shops, public transport etc. The only time it should be necessary to get cash out with these methods is if you've left yourself short by miscalculating the amount of petty cash you need handy. If this happens you can do these things:
a) go somewhere which does take credit.
b) get the cash out and do an immediate balance transfer onto another card (remember to include the cash out fee as payment will he applied to fees first.) At least you won't pay cash out interest rate. (but be careful of 'handling fees.')
c) if you're close to a pay day, get the cash out and pay it off first when you get paid, before any other bills, to avoid the hefty interest rate.
4. Pay your bills with an instant payment method. Such as phone banking or internet banking or whatever, rather than sending a cheque. The delay for your cheque to arrive and clear will mean your unpaid daily balance will not be reduced for this period. So you will pay more interest using cheque payments because your average unpaid daily balance will he higher. Also with these methods you'll be making more regular payments for reasons we shall see, so having this clear is a must.
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