How To Avoid Credit Card Fees

Credit cards are an almost essential part of many people's lives, because
they allow you to increase your cash flow and have more financial freedom.
However, if you use credit cards too much or in the wrong way you can be
stung with large credit card fees and penalties. Avoiding these fees will
help you to cut the costs of using a credit card and get the most out of its
benefits. If you want to know how to avoid these credit card fees then this
article can help you do just that.

Grace periods

A grace period is the time you have to pay off your credit card debt before
you start paying interest. Although many cards used to have good grace
periods, these are reducing and some have none at all. This means you will
start accruing interest from the moment that you make a purchase. If your
card does have a grace period, then the best way to avoid extra interest
charges is to pay off the balance in full before the end of each grace
period. This will mean you can use your credit card without having to pay
interest.

Late fees

One of the most expensive fees you might have to pay is for late payment.
Although you might not think this will apply to you, it is very easy to be a
day or two late with payment, especially if you have a lot of cards and
bills. Late payment fees can be as much as £35, and if you are near the end
of your credit limit could trigger other penalties such as over limit fees.
Before you know what has happened you might owe £100 in fees, which is
basically money wasted. To avoid these late fees, try and pay your bill by
direct debit if possible, or use online banking to speed up the process of
paying your bill. This will ensure that your money arrives on time. If you
think you are going to be late with payment, try calling your credit card
company to inform them. If they know it will be late they might be able to
waive the penalty fee, especially if you usually pay on time.

Annual fees

Another fee that can cost you money is the credit card annual fee. Although
this fee used to be commonplace, less and less cards are now charging an
annual fee. Unless you have a gold or platinum card, then you really
shouldn't have to pay an annual fee. Although there will be some issuers
charging annual fees, unless the benefits you get for the fee are
significantly more than the fee you should find another card.

More than just the fees

Perhaps the biggest problem with some of these penalty fees is that if you
have to pay them, it can mean more money lost for you than simply the
penalty fee. For example, if you are late with payment a few times, the card
issuer may remove your low interest rate. This could end up costing you a
lot of money, especially if you have a large balance on your card. In order
to avoid these fees, make sure you carry out your payment obligations, and
also read the contract in full before signing for the card. That way you
will know what the fees are in case the worst should happen.

About The Author: Peter Kenny is a writer for creditcards-gb Please visit us
at http://www.creditcards-gb.co.uk and
http://www.thriftyscot.co.uk/Credit-Cards/