Thinking of applying for a credit card but don’t know how much it will cost you to get it. The credit card also has two sides like a coin. It can either turn out to be your friend in disguise or your biggest enemy. You need to carefully assess all the information about the credit cards be it rewards program, features & benefits, and all the charges associated with it. It is best to make an informed decision as taking a credit card is one the most important decisions that you will ever make in your life. Here are some of the hidden credit card charges that you must be aware of before applying for a credit card.
- Late Payment Charges: On paying the credit card dues after the due date, the credit card issuer charges a late payment fee on the credit card due amount. To avoid paying this you can choose to pay the minimum due amount on or before the due date.
- Overdraft Charges: This is charged when you use your credit card beyond the provided credit limit. You get a certain amount of unsecured debt on your credit card which you can use to fund your purchases. Going beyond the limit can not only impact your credit score but will attract the overdraft charge as well. To avoid this from happening you can set a threshold limit between 30% – 40% on your credit card so that you do not use it beyond the provided limit.
- Fuel Surcharge: While making payment of fuel purchase using a credit card, you are charged with the fuel surcharge fees. This can increase your expense, in order to avoid this apply for those credit cards which provide the benefit of a fuel surcharge waiver.
- Cash Advance fee: Sometimes you may use your credit card at ATMs to withdraw cash but you should know that this type of transaction attracts cash advance charges. You should use your credit card at ATMs only when it is an emergency, while other times avoid it.
- Lost Card charges: It is possible to lose your credit card and applying for a new/duplicate credit card attracts lost card charges which you will require to pay. Otherwise, you won’t get a new credit card.
- Foreign Markup fees: On using your credit card for foreign transactions, you will be charged a foreign markup fee. If you make frequent foreign transactions then you must go for a credit card that has fewer foreign markup fees.
To conclude, the above-mentioned are some of the top hidden charges apart from the Finance charges that can be levied on a credit cardholder. Finance charges or interest on credit card due amount is charged when you default on the payment of credit card outstanding balance. This one is not a hidden charge but everyone should be aware of how important it is to pay the credit card dues on time. Make a note of the above 6 hidden charges and use your credit card wisely so that you can avoid paying them.
Do share your experience with the hidden charges that you were charged on your credit card in the comment section.