Credit Card Fees: What Are They And How Can You Avoid Them

I was reading Robin Askwith’s autobiography recently. Apart from laughing out loud at the many exploits which he got up to when shooting the Confessions… films, Robin made a point about an American Express card which he was given that was soon spent on buying a ticket to a far-flung country. Robin said that he expected to be given a bill one day which, undoubtedly, might incur hidden charges.

Credit cards are not an unlimited source of income. After all, if money was easy to obtain, no one would ever work and we would always be on holiday. Just like with any other source of income, there are many credit card fees which are attributed. Here are some of the fees which could be charged when using a credit card:

Transfer Fees

A transfer fee is charged when you move money from one account to a credit card in order to boost the amount of money which your credit card has. Some credit card companies may see this as an unusual transfer and will apply charges when the remaining amount is paid off. When you don’t transfer money from an account to your credit card, transfer fees won’t be charged.

Annual Fees

Many credit card companies charge you for simply owning one. Even if you do not regularly use your credit card, charges will still be made. However, not every credit card company charges annual fees. In order to avoid annual fees from happening at all, you should check if they will be charged when making a credit card application.

International Fees

Applicable when you are abroad and you use your credit card to pay for something, international fees aren’t an obligatory credit card fee because you are directly responsible for them happening in the first place. Paying for something when you are on holiday or on a business trip doesn’t always require a credit card because other forms of payment can be used instead. As well as getting money from a foreign exchange company, you could also use travelers checks. Therefore, international fees won’t be charged because a completely different form of payment has been used.

Inactivity Fee

Many credit card companies charge an inactivity fee if your credit card is not used for a while. The amount of money which is charged by credit card companies ranges from one to another. In order to stop being charged an inactivity fee, you could use your card every two months to buy a low value item such as a bottle of wine.

Late Fee

A late fee is typically the number one source of income for credit card companies because many people do not repay the money which they owe before it is due. To avoid late fees, you should pay your credit card bill on time. Therefore, your credit rating will not be affected and no late fees will be charged at all.

Credit Limit Fees 

When you apply for a credit card, you are permitted to withdraw a maximum amount of money which can be thousands of pounds. Credit limit fees are often considerable but can be easily avoided by keeping in mind what the maximum amount of money is for your card. Therefore, you can use your credit card in confidence because you’ll know that your limit hasn’t been surpassed.

Over-The-Phone Fees

Many credit card companies enable you to pay your bill over the telephone. However, this service is not free and many credit card companies charge when their customers contact their customer service team in order to pay off their bill. To avoid paying over-the-phone fees, you could pay for your credit card bill online because this particular service is free.

Credit Limit Increase Fees

A credit limit increase fee can often be unavoidable. It is charged when you ask a credit card company to increase the maximum amount of money which is allowed on your credit card. If you are due to pay a very large figure using your credit card but it surpasses your credit card limit, an increase fee is therefore unavoidable. However, there are ways to prevent it from being charged altogether. If you haven’t got a credit card yet but you want to have one, you could look at the maximum figure which is allowed for each credit card. Therefore, you will know that you can pay for an upcoming large bill and won’t be charged for doing so.

A credit card can be a lifesaver. Giving you instant access to cash, it can be used in order to buy something when you are shopping or paying for an urgent bill that might be thousands of pounds. However, you should know of the many fees which might be applied and how they can be avoided.

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