The Fine Print: The Hidden Fees in Credit Cards

Credit cards are one of the most expensive credit financial services available to consumers. The “hidden” fees that come with credit cards are charged to consumers, but most customers aren’t aware of these fees, as they have not read the fine print in the credit card agreement upon account opening.

Being late on a credit card payment can cost you more than the varying late fees of $15.00 to $39.00. If you are teetering dangerously close to the edge of the credit limit, these late fees can often be coupled with over limit fees upwards of $39.00. These over limit fees are charged for each month that the balance is over the limit, even if the outstanding balance is cents over the limit – the charge is applied to the account, accumulating interest.
Once late payments have been recognized by the credit card company, the interest rate is liable to be increased upwards of thirty percent, which is the default maximum interest rate for most credit card companies.

Late fees can be avoided by ensuring that the minimum monthly payment is made on a monthly basis, after the statement has arrived in the mail, well before the date on which the payment is due.

These fees are a way for banks to recover the costs, for example, the costs that are associated with a late payment. Banks and other lending institutions collect millions of dollars in fees each year, which are attributed to annual fees, rewards and program fees, interest rates and cash advance fees.

An astonishing number of customers are unaware of the repercussions that come with a cash advance. Not only is there a 3% fee accumulated of the total that is taken from the account for the cash advance, but interest accumulates on the amount daily – until the cash advance has been paid in full. Using a credit card for cash advances is one of the worst ways that a customer can use a credit card, one of the biggest mistakes that one makes while using their credit card.