Are These Hidden Credit Card Fees Costing You? - Refresh Financial

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Are These Hidden Credit Card Fees Costing You?

Don’t let surprise fees stall your credit recovery

As you try and focus on rebuilding your credit, it can be frustrating when the credit card companies seem to be working against you. There’s a ton of advantages to having a credit card in this day and age, but you might have noticed a lot of fine print when you signed for your card. Sometimes, this fine print can hide all sorts of fees. Are these hidden credit card fees costing you?

It’s easy to get into credit trouble but with the right strategy, the path to recovery can be easier than you think. Being aware and avoiding these hidden costs can put a dent in your debt. Here are some of the hidden fees that might be hurting you.

1. Balance Transfer Fees

This fee is applied when you transfer the balance of one of your credit cards to another. It can make sense to do this if one card has a lower interest rate. Oftentimes, you will pay a percentage of the balance as your balance transfer fee.

2. Expired Introductory Offers

Many credit cards can have benefits that expire shortly after acquiring your card. The promise of lower rates are an effective way to get people interested, but we oftentimes forget that these benefits come to an end. If you’re suddenly paying more interest on your credit card balance, it could be because the introductory offer has expired.

3. Balance Protection

Although this feature is typically optional, balance protection is something we might say yes to without fully understanding what it is. This form of insurance is meant to protect you in the event you are unable to make payments. In some cases, your minimum payment will be met if you find yourself unemployed. In other instances, your entire balance might be taken care of in the event that you pass away.

Your balance protection payment is often a percentage of the balance you’re carrying each month and is usually something we don’t realize we’re paying. We either selected ‘yes’ without understanding the question during our application process, or we forgot to cancel this feature after a free trial.

The thing is, balance protection is often taken care of by your disability insurance or your life insurance. These things make balance protection unnecessary and redundant for most people.

4. Cash Advance Fees

A cash advance is when you take money out of an ATM using your credit card. The problem with cash advances is that they often come with much higher interest rates than regular purchases on your credit card. You may also pay a fee at the ATM.

5. Charges on Foreign Transactions

When you purchase items in other currencies or when you are traveling abroad, you can incur fees for converting the currency. It is best to research these potential fees before you head to another country with your credit cards.

6. Inactivity fees

Specified by the issuer, this is a fee charged to credit card holders if they have not used their card in a certain amount of time. Check your agreement to find out how long this period of time is. Plus, using your card responsibly and regularly is a great way to continue building your credit score.

7. Late fees

If you’re accidentally late on a payment, you could incur a late fee charge. You’ll also take a hit on your credit score when that late payment gets reported to the credit bureau, and even a single late payment can lurk on your credit report. It’s always best to make payments on time, every single time, consistently.

What are some of our tips to avoid late fees? Read our blog here.

8. Annual fees

Some credit cards have annual fees that you’ll make because you’re the card holder. This is something consumers often overlook and are surprised by at the end of the year. Try and look for credit cards that offer no annual fees instead.

Do Your Homework

The best way to ensure you’re not surprised by fees is to do your homework before you sign up for a credit card. Familiarize yourself with the ins and outs of the card you’re considering and find one that suits your budget and lifestyle.

If you’ve been overwhelmed by fees and your balance just keeps growing, you might consider a credit rebuilding program. Credit rebuilding programs are a fantastic strategy and are geared towards getting you back on track with your credit. You can learn more about credit recovery programs at Refresh Financial by clicking here.

Have you ever been surprised by hidden fees associated with credit cards? Let us know which ones in the comments!

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