Credit > Fees (1) Annual Fees Some credit card companies charge an annual fee, while others do not. Credit cards that charge an annual fee may offer lower interest rates. If you allow balances to carry over from one month to the next, the savings that you would otherwise earn from the low interest rates may be erased by the cost of the annual fee. If you rarely use your credit card or pay the balance off on a monthly basis, consider a card that does not charge a yearly fee. Annual fees vary but are usually in the range of $15 to $100 per year. They are automatically billed to your card at the yearly anniversary. Penalty Fees Most credit card issuers reserve the right to charge penalty fees to consumers who do not meet the obligations of their credit card agreement. Penalty fees are very expensive relative to a consumer’s balance and can be a major obstacle in reducing balances. Penalty fees are added to the balance, which enables the issuer to earn interest on them. Smart consumers are aware of their due dates and credit limits, and monitor their statements carefully to detect penalty fees. If you are assessed penalty fees, call the credit card issuer and request that the fees be waived. Credit card companies will often waive penalty fees for good paying clients. Late Fees Credit card issuers charge a late fee when a consumer fails to make a monthly payment by their due date. Late fees usually range from $10 to $35. Some card issuers charge late fees based on a percentage of the balance owed. Over-limit fees Over-limit fees are charged when a consumer’s balance is above their credit limit. Accrued interest and late fees can send a consumer over their credit limit. Over-limit fees usually range from $10 to $30. |
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