While credit cards are no doubt a very convenient and helpful financial tool, more often than not, they come with a host of fees that can quickly accumulate and erode your hard-earned cash.
From annual and late payment charges to foreign transaction fees and over-the-limit fees, the costs associated with using credit cards are sometimes overwhelming. However, with a bit of financial knowledge, discipline, and strategic planning in place, you’ll be able to avoid most of these charges and thereby keep more of your money where it belongs – in your pocket.
Here are ten smart strategies to help you avoid credit card fees and save more money.
1. Apply for a No-Annual-Fee Credit Card
The first credit card fee we need to look at is the annual fee, which, depending on the card, can range from just a few dollars to hundreds. No-annual-fee credit cards don’t charge you a yearly amount to utilize them.
Annual fees are often applied for things like reward benefits that come with having a credit card. The fee is paid as part of your credit card bill.
So, when shopping around for a new credit card provider, be sure to look for one that offers a credit card with no annual fee. When you open such an account, you won’t be charged a fee to either open it or keep the card.
Remember though, you might be charged other fees such as a balance transfer fee, late payment fee, or interest on purchases if you don’t pay your balance in time. However, if you’re disciplined and keep up with your monthly repayments, you can enjoy the convenience of borrowing cash via a credit card without the ongoing cost of having it.
The downside is that no-annual-fee cards usually charge higher interest rates and don’t normally offer generous awards or spending benefits. Before applying for such a card, think about what features you most need from a card. Will you be using it every day or just for funding the occasional large project? If you just need an easy way to borrow money or an emergency safety feature, this could be the credit card you’re looking for.
2. Avoid Late Payment Fees
Late fees add up and can become a major expense. Ensure you pay the credit card bill every month on time to avoid them. Do whatever you need to make that happen. Why not set up an automated payment or a reminder of when the payment is due so you'll remember and never miss out on making the payment?
If you do happen to miss making a payment, contact your credit card issuer and ask that they waive the late fee; most issuers will do this once or even twice, as a courtesy.
3. Take Advantage of Balance Transfer Offers
If you're carrying a balance on a high-interest credit card, consider using a balance transfer offer. Many credit card issuers have promotional 0% APRs on balance transfers that let you transfer your existing balance onto a new card with no interest charges for a certain time frame. This can help you save hundreds if not thousands in interest fees.
4. No Foreign Transaction Fees
If you consistently travel abroad or buy things from foreign merchants, you need a credit card with no foreign transaction fees. Many of these fees range from 1% to 3% of the total amount of your transaction. This adds up to a lot over time and makes purchases cost way more money than they should.
5. Avoid Over-the-Limit Fees
Over-the-limit fees are what the credit card company charges when you use more than the stipulated spending limit on your credit card. Such fees can be avoided by monitoring the balance on your credit card and refraining from any spending above it.
If you really must spend as a once-off, try calling your credit card issuer and asking them to increase your credit limit; this may be possible and will protect you from over-limit fees.
6. Apply Balance Transfers Wisely
In addition to keeping away from interest charges with the help of balance transfer offers, you can take advantage of such offers in many other ways to avoid charges.
Some card providers give no-fee balance transfer cards that might put you in a position to save money as opposed to your current card being used.
You can also transfer your balance in order to consolidate multiple high-interest balances onto one card, thus saving on fees and making your payments easier.
7. Negotiate with Your Credit Card Issuer
If you have been a good customer and always paid well on time, there is no reason you can’t negotiate a better deal with your credit card provider.
Call the credit card issuer and request, as pleasantly as possible, that they either remove or decrease some of the costs, such as the annual fee or late fees. Most issuers will bend backward to please a good customer and maintain good relations with them.
8. Avoid Cash Advances
Cash advances are convenient but costly. Most credit card cash advances bear high fees and interest rates (as much as 5%). Normally, cash advances do not have a grace period, and one starts incurring the interest charges immediately.
Avoid using your credit card to get cash advances as much as possible in order to avoid these unnecessary fees.
9. Use Credit Card Rewards and Benefits
Most credit cards offer rewards and benefits that more than offset the cost of fees if you use them. For example, many issuers will offer statement credits or reimbursements for some of the fees, including airline baggage fees or even Global Entry/TSA PreCheck application fees.
By using these benefits, losing money to credit card fees can be a thing of the past.
10. Be Attentive to Your Statements
Few people read their credit card statements carefully and it’s to their detriment. You must set aside time each month to go through your statement to ensure that you are not being charged for something you never agreed to or did not know about.
If you find something that looks “off,” alert your credit card issuer in case of any discrepancies or suspicious activities. This monthly time spent can get your issues about excess fees resolved before they turn out to be a major headache. It could also save you from being scammed.
Conclusion
Part of financial health involves keeping your credit card fees to a minimum. These ten smart strategies will help you reduce your credit card fees so that you can start saving.
Keep in mind that you need to be proactive and always on the lookout for exactly what is going on in your credit card account. Protect yourself from hidden fees, unwanted subscriptions, unauthorized debit orders, and scams. Enjoy the benefits and convenience of having a credit card without paying unnecessary fees.
