What types of fees do consumers pay when applying for a credit card?
Answered on Saturday, October 16th, 2010 by
James Williams

Credit cards offer easy financial transactions and can be used typically anywhere in the world. In the current credit driven economy, they are almost indispensible to everyone. Different credit cards come with different features and depending on the features, consumers must pay a price to obtain these cards.

Credit cards are usually classified depending upon the features they offer. Cards are customized to fit the need of everyone including students and people with bad credit line. Credit cards that offer very good reward schemes and benefits, and have high or unlimited credit limits come with a fee. The companies offering these premium cards charge a fee amount for using their services. Applicants for such cards must have an excellent credit history, and should be able to pay the fee amount every year. In return, premium credit card holders enjoy a lower interest rates compared to that of other cards. These cards are mainly designed for small business owners and businessmen.

Most of the regular credit cards that are available today do not charge annual fee. These cards are designed for a very basic usage, and usually will have a set credit limit depending upon the applicant`s credit history. They will offer basic reward schemes like point system or cash back. Anyone with a good credit history can apply for these cards and get approved. These cards have high interest rates, since they do not charge any fee. Loyal customers of credit card companies can get an upgrade to premium cards that the company offers, without paying any annual fee. This is the best possible way to avoid paying fees for high end cards.

People with bad credit history also can apply for credit cards, and although they do not charge an annual fee, the interest rates are very high. Cards like prepaid credit cards and secured credit cards charge a fee amount annually. Before signing up for a credit card, reading the fine print will give a better understanding about various other transaction fees and processing fees associated with the credit card.

Activities like late bill payments, delayed bill payments, international transactions, usage of cards in ATMs of different service providers, and online transfers of money will be charged a transaction fee of a specified percentage. These charges will be mentioned in the agreement and in the bill generated every month. To know the nature of charges in depth, it is very mandatory to read the bill thoroughly every month.

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