Credit cards are almost a necessity for a lot of people because they let you get more money and have more freedom with your money. But if you use your credit card too much or in the wrong way, you could end up paying big fees and penalties. If you avoid these fees, you can use your credit card for less money and get the most out of its benefits. This article will tell you how to avoid these credit card fees.
Grace periods
The time you have to pay off your credit card debt before you have to start paying interest is called the grace period. Even though many credit cards used to have good grace periods, these are getting shorter and some no longer have any. This means that you will start to pay interest as soon as you buy something. If your card has a grace period, the best way to avoid extra interest charges is to pay off the balance in full before the end of each grace period. This means you won't have to pay interest when you use your credit card.
Late fees
If you pay late, you might have to pay one of the most expensive fees. Even though you might not think this applies 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 high as GBP35, and if you are close to your credit limit's end, you may have to pay over limit fees or other penalties. Before you know what's going on, you could owe GBP100 in fees, which is a lot of wasted money. To avoid these late fees, try to pay your bill by direct debit if you can, or use online banking to pay your bill faster. This will make sure that your money gets to you when you need it. If you think you won't be able to pay on time, call your credit card company to let them know. If you usually pay on time, and they know you will be late, they might not charge you the late fee.
Annual fees
The annual fee for your credit card is another fee that can cost you money. This fee used to be pretty common, but these days, less and less cards charge an annual fee. You shouldn't have to pay an annual fee unless you have a gold or platinum card. Even though some issuers will charge annual fees, you should find another card unless the benefits you get for the fee are much more than the fee.
Besides just the fees
Some of these penalty fees might be the worst because if you have to pay them, you might lose more money than just the penalty fee. For example, if you pay late a few times, the company that gave you the card may take away your low interest rate. If you have a big balance on your card, this could end up costing you a lot of money. Make sure you meet your payment obligations and read the whole contract before you sign for the card to avoid these fees. So, if something bad happens, you will know what the fees are.
