Another hidden cost in credit cards involves changeable rates. These cards have no specific set rate and can vary up and down. Such cards should be monitored closely and high rates for no apparent reason should be questioned. With some companies, if you miss one payment or are a day late, your rates automatically go up.
Credit card companies routinely impose fees for late payments, and for going over your credit limit even if only by a few cents. An increase in your credit limit might sound good, but many credit card companies charge for that as well. Certain transaction fees may apply for ATM cash withdrawals or for using checks from your credit card to pay bills. Some cards charge yearly fees and account maintenance fees as well. All of these add up quickly and should be factored in to the overall cost of using your card.
Tips For Avoiding Hidden Fees
There are some things that you can do to steer clear of some of these hidden costs. First, make sure read the entire credit card agreement the company provides to you when you apply for or open an account.
Make sure that you make your payments on time and never go over your credit limit. If you can, it is also helpful to pay off your credit card balance every month.
Many people fall into the trap in college of having more than one credit card. Even high school students are bombarded with credit card applications and free offers to make accepting the cards all the more attractive. Multiple cards mean multiple fees. If you have more than one credit card, decide which one you want to keep and pay off and close out the other cards. You’ll be far less susceptible to hidden costs with only one credit card and it is quite easy to choose a major card that will be accepted anywhere you routinely shop.