Credit Card Expert

Avoiding Credit Card Fees
Tips on How To Avoid Credit Card Fees

The issue of credit card fees is one of the most contentious, and one of the most difficult, in the financial industry.  Many consumers are surprised by the high charges and higher interest rates they may encounter after only a single late payment, and it is important for those cardholders to know how to sidestep these high fees.

Perhaps the most controversial, and potentially dangerous, of credit card practices is known as universal default.  With universal default, being late on a single bill can result in the interest rates for unrelated credit card bills to jump up to sky-high rates, often as high as 30% or more.  Missing a single payment can wreak financial havoc on those credit card owners who carry a balance on one or more cards.

Fortunately there are ways to avoid this controversial practice, especially since some card issuers, like Citigroup, have announced that they are abandoning the practice. It is a good idea for those who carry a balance on their cards to check with the issuers to determine whether or not they participate in universal default.  If they do, it may be time to look for a different card.

When it comes to late fees, over limit fees and other nuisance charges, it may be possible for a cardholder in good standing to get those fees waived, at least the first time.  Credit card issuers are reluctant to lose a good customer, and they may be willing to provide a one time credit or eliminate those charges if you simply ask.  If the front line customer service representative is unwilling, or unable, to make the adjustment, ask to speak to a supervisor.  Getting those charges reduced or eliminated may be as simple as asking for the adjustment.

The same advice can even apply to annual fees.  Credit cards do not advertise the fact that they often waive the annual fees on their cards to keep good customers happy.  So if you like the airline miles but not the annual fee on your airline partner credit card, ask about having the fee waived or switching to a no fee card with the same benefits.

In addition to annual fees and late charges, credit card holders also need to be on the lookout for so-called double billing.  Double-billing takes place when the credit card company charges interest on the entire balance, even if part of it has already been paid.  This means that the consumer ends up paying interest on money that has already been paid.  Many credit card issuers use the average daily balance method to determine finance charges, and this can leave customers vulnerable to double-billing.  In order to avoid these additional charges, be sure to look for a card that uses the billing cycle method to calculate finance charges.

It can be quite a challenge to eliminate credit card fees and nuisance charges from your financial life, but with a little bit of research and a lot of hard work you should be able to keep more of your hard earned money and send most of those fees packing.  Don’t be afraid to ask the card issuer for help, and remember that the bank will often do what they can to keep you as a customer.  Credit card holders can be quite expensive to attract, and the fierce competition in the industry means that the issuing banks may be willing to reduce or even eliminate some of their more egregious fees if you simply ask.


Related Links:

Credit Card Fees Calculator

Card Watch

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