Credit cards are great sources for earning rewards, paying for unanticipated expenses and building credit. But though there are many benefits of owning a credit card, there are sometimes hidden fees and penalties that aren’t transparent.
Watch out for these five common credit card fees when choosing a card.
Among the most common of credit card expenses are annual fees. They’re pretty self-explanatory—annual fee rates can range significantly, with high fees usually associated with valuable card benefits. Sometimes high annual fees can be caused by having a poor credit score. If you’re not looking for a card with huge benefits, be sure to shop around before committing. There are plenty of cards that offer reward points and cash-back offerings without annual fees.
A balance transfer fee can be charged when credit card debt is transferred from one card to a different card. Rather than spend money to transfer debt, look for opportunities to inexpensively transfer your balance to a lower-interest-rate card or simply work to put spare money into the debt itself.
Another common expense is a late fee. If you don’t make your payments on time, you’re likely going to get charged a fee. This is by far the easiest fee to avoid. Pay close attention to your due dates, and you’ll have nothing to worry about.
A cash advance is a loan from a credit card that is added to its balance. Generally, you can’t take a cash advance for the full amount of your accessible credit, and it usually comes with a higher interest rate.
Foreign transaction fees are sometimes charged when using your card outside of the United States. For example, if you make a purchase that passes through a foreign bank or in a currency other than U.S. dollars, a fee will be charged. Foreign transaction fees can become pretty costly if you travel outside the country often. Be wary of your card’s terms and conditions before spending while you travel.
Aim high by keeping your unnecessary fees low. Keep your credit card cost to little or nothing by looking out for common fees. Find your No Annual Fee, No Balance Transfer Fee and No Cash Advance Fee Visa Card here at Sioux Falls Fed.