In today’s day and age, it’s nearly impossible to get by without a credit card. Whether you have one for just emergencies, or you are a frequent card user, there are sneaky hidden fees that can bite you if you’re not paying attention. To avoid getting charged more than you should, or even getting charged to use your own money, below is a quick guide to the top five ways to avoid sneaky credit card charges.
1. Set Up Alerts
It’s really easy to miss due dates for payments, especially if you’ve got multiple credit cards, or multiple bills piling up at the same time. Most credit cards charge a late fee, and paying late also lowers your credit score, causing your interest rate to go up. The best thing to do is set up alerts through your bank, or to set up an alarm using a phone or calendar app. Give yourself plenty of time to pay your card, and always remember to pay more than the minimum to save on interest.
2. Beware of the ATM
Most cards offer money you can snag using an ATM. The problem is they don’t exactly explain how high the interest rate is for using your credit card like a debit card. More often than not, the interest rate for ATM use is much higher than the card’s APR, so whenever possible, stay away from using your card to get cash.
3. Is Your APR Fixed?
When you first sign up for a card, you usually are given a break on paying interest on what you accumulate for a certain amount of time. This is great as long as you pay off your balance before your time runs out. Cards without fixed APRs tend to change without warning, and go with the flow of the economy as well as any changes in your credit score. Don’t be surprised if a card without a fixed APR changes from month to month, leaving you paying a little too much in interest.
4. Mind Your Limit
Banks have a habit of raising the limit on their credit cards as a way to entice you to spend more. Unfortunately, many of us fall pray to that trick. Remember that the more money you put on the card, the more interest you’ll be paying. This technically means in the end that you’ll be paying a bank money in order to use your own card. Even if they give you a higher limit, keep in mind what you can realistically pay.
5. Transfer Trouble
Sometimes we find that one of our cards has a significantly lower APR than the others, and we are tempted to use one credit card to pay another just to take advantage of that lower interest rate. Some banks and card companies will charge a fee to transfer balances, or will not allow you to pay a credit card off with another credit card without an added fee. Before you try to transfer any money, make sure you read the fine print.