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We love credit cards and use them for almost every purchase but how do we avoid some
of the high charges often associated with credit cards? Read on to find out some
easy ways to protect yourself from hidden fees and costs, and thus improving your
Some people rush into getting a credit card without being aware of all of the costs.
A lot of credit cards out there come with hidden fees and charges, and you should
always pay special attention to them before you apply.
In many cases, these fees and charges don't even get noticed until it's too late.
You could easily end up paying possibly thousands of dollars at the end of the year
without even realizing it.
1. One hidden fees is found in the grace period. The grace period refers to the extra
time you've to pay your credit card bill from the time you receive until the actual
For that period of time, usually around three weeks, you aren't charged any interest
or fees on your latest purchase. Although that sounds like a great deal to good to
be missed, it can quickly lead to a pitfall if you aren't careful.
To avoid hidden costs or fees of any kind, you should pay your bill as soon as it
arrives and you'll have nothing to worry – grace period or the interest that can
accrue from letting your credit card bill get later and later.
2. When you're late in your payment, credit card companies typically impose a late
fee of $15 to $39 for each occurrence. This is added to the balance which they can
charge interest on.
Even your payment is just a day late, your low interest rate may get hiked up to
as much as 30 percent or more.
And the bad news is, it can be raised on not just the card you made late payment
on but also all other cards or revolving accounts that you have. This can lower your
credit score which results in a higher interest rate on future loans. Hence, your
best strategy is to be organized with your finances and pay beforehand, or call the
credit card company and arrange a deadline that's right for you such as your payday.
3. Almost all credit cards have hidden costs when making purchases in other currencies.
Before you use your card overseas, make sure you factor these additional charges.
4. Read all of the fine print on your credit card agreement. It often gives the card
issuer the right to change its interest rates and its fees for any reason. The credit
card company often needs to give you only 15 days’ notice before bumping up your
interest rate or raising its fees.
In a word, the best way to avoid any hidden fees or costs is to pay your credit card
bill on time. You should also always pay more than the minimum amount as this helps
to pay your bill off faster and ensure that you are actually paying on the principal
and not just the interest.