You don’t need to pay credit card fees. Follow these tips to be free.
Go through the terms of most credit cards and you’ll see a few fees that the card issuer may charge. These sometimes scare consumers, especially those who don’t want to pay extra just to have a credit card.
The good news is, with every credit card charge, there is a way to avoid it. If you’ve been charged credit card fees in the past or just want to make sure that doesn’t happen to you in the future, here’s what you can do.
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1. Use automatic payment
If you miss a credit card payment even by a day, the card issuer might charge a late fee. It can also hurt your credit score if you go 30 days or more without making the payment. Most credit card companies will waive your early late fees if you call and ask. But you only get one of these mulligans.
The easiest way to avoid this problem is to set up automatic payments. This way, there is no risk of forgetting.
2. Make sure your bank account has enough to cover your credit card payment.
There is one way your payment can go wrong, even with automatic payment. If your credit card bill is more than what you have in your bank account, the payment may be rejected. Your card issuer may then charge you a return payment fee. To make matters worse, your bank may charge a checking account fee if you don’t have enough money in your account.
Keep an eye on your credit card and bank account balances, especially when your payment is due soon, so that doesn’t happen to you.
3. Have at least one card with no transaction fees abroad
Many credit cards have an overseas transaction fee, the standard amount being 3%. These apply to all purchases that go through foreign banks and that are made in currencies other than the US dollar.
The most common situation when you incur foreign transaction fees is international travel. But you can even incur foreign transaction fees when shopping online. This can happen if you shop from home using merchants based outside of the United States.
It is recommended to have at least one credit card with no foreign transaction fees. There are plenty of them available, and the Travel Rewards Cards are a good place to start.
4. Set your cash advance limit as low as possible
A credit card cash advance involves using your card to get money. This doesn’t just apply to using your card with an ATM. Any type of transaction involving sending money, such as a wire transfer, can also be considered a cash advance. Not only do these have fees and often a higher APR, your card issuer may start charging you interest immediately.
I like to be very careful to avoid cash advances, so I contact the card issuer and ask them to set my cash advance limit to the minimum. Depending on the card issuer, this typically ranges from $ 0 to $ 100. If a transaction is to be considered a cash advance and exceeds this limit, it will not be completed.
5. Downgrade, cancel or negotiate credit cards with annual fees
Credit cards with an annual fee may be worth it. But if your annual card fee is coming up and you don’t want to pay it, there are several options to avoid it:
- Downgrade the credit card to a no annual fee card in the range of the card issuer. This allows you to keep the account open without paying an annual fee.
- Cancel the credit card. Just make sure you know how to close a card without hurting your credit score.
- Contact the card issuer to see if they are willing to waive the annual fee for a year. Sometimes credit card companies do this as a retention offer to prevent you from canceling your card.
6. Don’t opt for out-of-limit charges
Your card’s credit limit is the maximum amount you can spend. If a transaction pushes the balance above this limit, it will be declined.