6 fees to consider before signing up for a credit card

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Don’t be hit with surprise costs when signing up for a card.


Key points

  • If you’re signing up for a new credit card, it’s important to know the details.
  • Specifically, some cards charge fees for certain things, like overseas transactions or even just becoming a customer.
  • It is important to investigate any fees your card may charge before signing up.

If you are considering taking out a credit card, you need to make sure that it will not incur any unexpected costs.

Unfortunately, some cards may be more expensive than others and may not justify their price. You don’t want to end up with any of them, so check out these six fees before deciding if the card in question is the right one for you.

1. Annual subscriptions

Some cards charge an annual fee just for opening the card. This can range from a relatively affordable annual cost to fees of several hundred dollars per year.

You shouldn’t necessarily avoid a credit card just because you have to pay a fee, as there are often generous perks that make these cards worthwhile. But you’ll want to know the upfront cost, calculate the value of the fee versus the cardholder’s benefits, and make sure the payment is worth it.

2. Foreign transaction fees

If you are traveling or making purchases from non-US vendors with your credit card, you should check for foreign transaction fees. If so, it could make your purchases more expensive for no reason, and you should seriously consider looking for a card that doesn’t come with this unnecessary extra cost.

3. Interest charges

Every credit card charges interest, but some cards have a higher rate than others. If you expect to have a balance at all times while the card is opened, it is extremely important to favor a low interest rate. In fact, the APR may matter more than any rewards program the card may offer, because the interest charges outweigh the value of the rewards you can earn.

4. Late fees

Some credit cards charge high late fees. Although you ideally want to pay your card on time, accidents can happen. Make sure you know how much you’ll be charged if you pay late and do your best to avoid this by setting up automatic payments of at least the minimum due.

5. Overlimit Fee

Overlimit fees are also common if you go over your credit limit. You should try not to come close, but to use your credit no more than 30% of your available line of credit. If you exceed this ratio, you could hurt your credit score.

But if you tend to charge a lot on your cards and you’re getting close to the credit limit, you need to be aware of the charges you’ll end up paying.

6. Balance Transfer Fee

Finally, if you are considering transferring a balance from current credit cards to a new one in order to take advantage of a 0% APR offer, you should ensure that you are aware of the fees the card issuer will charge. . .

These fees are often worth paying to benefit from a 0% interest rate for months while you work on paying off the debt. But some cards charge lower fees than others, and you’ll want to take that into account when deciding which balance transfer offer is best.

By looking at all of these fees, you can choose a card that doesn’t impose a lot of additional fees – and you can be prepared for any expenses you incur with the credit card you open so you can make sure you’re re comfortable with these costs.

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