Tips for Avoiding Credit Card Fees

By: Shannon Hilson

We are all not strangers to credit card fees. Just about any one that owns a credit card has paid a fees at some point in their lifetime. Some fees are a result of misuse of the credit card or they are normal charges that come from your credit card company. An example of a normal charge is the annual fee that a credit card charges. This article will hopefully teach you how to avoid credit card fees.

The first thing you need to understand is that you must read the fine print of any credit card application that you sign up for. The fine print is where all of the rules are contained. This is where you will find things like what fees you will be charged, and why, and how to avoid paying those fees.

I'm sure you've wondered why a credit card company charges fees in the first place. Well, there are two reasons why: the first one is because the credit card company is able to offset the risk they are taking by approving high-risk borrowers by charging them high fees. Knowing this reason should make you not want to be one of those consumers in the high-risk category for credit card companies. The second reason credit card companies charge fees is because they want to earn a continuous stream of money for their company. Every time you use your credit card at a retail store, the credit card company earns between 1% and 3% from the retailer. On top of this payment from the retailer, they also gain money from their revenue, interest rate, and annual fees.

All of these fees combined can become overwhelming for the average consumer, and eventually you may find yourself with a large about of debt as a result. While the credit card companies continue to bring in a revenue.

The president has recently made into law something called the Credit Card Bill of Rights. This law regulates credit card companies to make sure that the fees that they charge do not get out of control. It is still your responsibility to pay on time so as to not allow the fees to mount up. On the other hand, there is an increase in the competition between credit card companies, so in an effort to keep in positive standing with their consumers there are many fees that are being waived.

No matter what, the best way to avoid paying any credit card fees is to pay your bill on time every time. If you are choosing to send by mail, do it 1 week in advance. If you are choosing to pay online, then give yourself at least 24 hours to make sure the payment is processed. Practicing good financial habits is always the best choice for you to make as a consumer. Always remember that it will cost you a lot of money in the long run if you keep racking up credit card fees.

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