Credit card companies are notorious for charging their
customers hidden fees that can add up quickly. Forgetting to check the fees
section of the credit card disclosure section could be a costly mistake.
Late fees--Most utilities and financial institutions
charge late fees. The fact that credit card companies charge such fees isn't
surprising. What is surprising is how high the fees can be, and how quickly
they're assessed. In the fine print on the back of the credit card offer, the
disclosure statement will list information about the late fees. Wise consumers
will stay away from the credit cards that assess a late fee at 1:00 PM on the
day the payment is due. It sounds crazy, but a large number of cards work this
way. The late fees themselves can be quite large--$39 is common. What's worse,
a lot of credit card companies will raise your interest rates if you have even
one late payment, so look for that too.
Over the limit fees--Credit card companies know how
embarrassing it can be to hand your card to a clerk to pay for dinner or a new
dress, only to have the card be rejected because you've gotten too close to
your spending limit. Many credit cards will continue to be accepted even after
a person has gone a bit over the limit--but the credit card company will charge
a hefty fee each time. If you're the type to forget how much credit you have,
choose a card that doesn't charge a fee if you go over the max.
Annual fees--Most credit card companies make their
money from charging cardholders an interest rate. Some card, though, also carry
an annual fee. Cards marketed to consumers with credit problems and cards that
include big reward packages are more likely to charge annual fees, which can be
hundreds of dollars a year. The credit card company continues to charge annual
fees until you cancel the card, even if you stop using it.
Balance transfer fees--If you have a high balance on
a credit card with less-than-terrific interest rates, you may be tempted by
credit card offers that promise to waive interest rates or charge low interest
rates on balance transfers. Read the fine print on the disclosure statement on
the back of the credit card offer. Some cards charge a balance transfer fee of
up to 10 percent, which can offset the benefit of a lower interest rate.