Two Credit Card Fees To Watch Out For (And One That’s Worth Paying)

Sunday, April 24th, 2016
Updated: April 24th, 2016
The content is accurate at the time of publication and is subject to change.

Generally, we can accept that paying fees is something most people don’t want to do. Bank fees, penalty fees, usage fees, processing fees—there are too many fees that crop up from day to day. So avoiding them whenever possible is a good thing to do. That goes for credit cards, too.

However, there are actually some fees that are worth paying. We’ll get to that later. First, let’s cover the two credit card fees that you never want to pay. These are the ones to watch out for. So here they are, and here’s how to avoid paying them.

Late payment fees are the number one fee to watch out for. First of all, they tend to be steep—it’ll cost you an average of $35 for letting that payment due date slip your mind. And second, they are totally, completely avoidable. That’s right—there’s no reason you should ever be paying this fee. Here’s why: you can easily set up payment reminders so you never forget to make that credit card payment. These can be texts, emails, or both. Set them to send a week before your due date, so you have time to get that payment in, even if you’re snail-mailing it.

If you want to be even surer that your payment isn’t late, go ahead and set up an automatic payment to post each month. That way, your amount due will automatically come out of your checking account, or whichever account you link, and you won’t have to worry at all. You can designate that just the minimum amount due is paid each month, or have the entire amount due transferred on the due date to avoid interest. It’s up to you.

One more thing about late payment fees—these days, it’s easy to find a card that doesn’t even charge them. Shop around for a no-fee credit card, and you won’t pay this fee if you forget the date.

The second fee to watch for is the over limit charge. This happens when you charge more than your credit limit. Instead of declining the transaction, your card issuer may approve the charge—and then slap you with a fee. Ouch. Also generally around $35 per hit, this fee can be avoided simply by setting up alerts to tell you when you’re close to your credit limit. When you get the alert, put your card away until you pay it down. It’s as simple as that.

Now, what’s that fee worth paying? It’s an annual fee. Yes, that’s one that many people think they want to avoid. But have you looked at what you get from that credit card that charges an annual fee? Usually it comes with great perks, like signup bonuses, thank you points that can be exchanged for gift cards or frequent flyer miles, purchase protection, concierge service, insurance, access to luxury airport lounges, and more. Next time you’re looking for a new credit card, don’t click away from one that charges an annual fee. Chances are, it’s worth it.

All rates and fees, and other terms and conditions of the products mentioned in this article/post are actual as of the last update date but are subject to change. See the current products' Terms & Conditions on the issuing banks' websites.

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