Watch out for Hidden Credit Card Charges
Credit cards may seem like a great way to spend money on the things you want, however many hide charges that could lead to you spending more than you bargained for. Find out how to avoid them and be more savvy with your plastic.
The majority of credit card providers charge a fee every time you use your card to withdraw cash. Interest will also be applied to the amount withdrawn from the moment it leaves your account. If you don't want to pay over the odds, try not to use your card for withdrawals unless it really is an emergency.
Research shows that many credit card holders are not actually aware that using their credit card abroad could cost them money. In fact, some credit card providers charge fees of up to 2.99 per cent every time you use your card to pay for something while you are on holiday. However, there are credit cards on the market that do not charge you for purchases abroad, so watch out for these fee-free deals.
Many online retailers add an administration fee when you pay for purchases with a credit card. You may find that this fee is only revealed once you have come to the end of the payment process on the website in question. This means that you could find yourself paying over the odds for a cheap plane ticket or similar. This practice is on the cards to be outlawed in the near future, but in the meantime, if you wish to avoid such costly charges, you may have to opt for payment by debit card instead. Charges on debit cards tend to be cheaper or free.
While there are some great 0% interest deals out there, it is easy to get caught in this trap. Once the interest-free period comes to an end, the interest rate will go up to a standard APR. Therefore, to avoid charges, you should always ensure you can clear any outstanding balance before that time is up. These offers can be a good way of borrowing money, but you do need to keep on top of your finances to benefit from them in the best possible way. Use a credit card comparison service to find the right card for you.
Balance transfer fees.
There are a great deal of credit card providers who offer very low or 0% rates on balance transfers from other credit cards you may have. Just as with 0% interest rates on purchases, they are for a set period, usually a few months or up to 2 years. However, be sure to read the small print; balance transfers almost always come with a fee. This tends to be a percentage of the amount transferred. As with 0% interest deals, you need to keep up with regular payments to avoid higher interest rates once the period has ended.
When paying back what you owe on a credit card, you need to be aware that if you do not meet a minimum amount each month, you will incur a late fee. This is easier to manage if you set up a Direct Debit to automatically pay off your credit card bill from your bank account, however you do need to make sure that you have enough money in your account each month to avoid being caught out with your bank.