In today’s time, buying things and living a satisfactory life is achievable by most people if they have a sound mind and good decision-making capabilities when it comes to finances. A helpful means for consumers is a credit card, which provides a credit amount for you to buy and some fees/interest at the end of the month; it is also important to know how to check a free CIBIL score through the CIBIL score app or website. However, numerous fees are lurking behind this magical card, which you should be aware of and some ways to avoid leading to help you save some money.
In this article, we will delve into the world of credit card charges and, along with it, possible ways to avoid them!
What Are Credit Card Fees?
Credit card fees are any fees related to your credit account that differ from the interest fees, which are charged to you only when you carry a balance. Commonly, typical credit card fees encompass balance transfer fees, which occur when you transfer a different debt to your card. An annual fee for using the services of a credit card and foreign transaction fees in case of doing foreign transactions. Using a free CIBIL score checking website is also important.
Kinds of Credit Card Fees
There are various kinds of credit card fees which you can face when you opt to use a credit card, and there are ways to avoid some, too, so let’s glance into it:
Annual Fees
Annual fees for a credit card are the same as any other annual fee for a service you use, such as a gym or an exclusive club. Credit Cards provide you the benefit of revolving a balance, helping you make your purchase over a certain period. The best way to avoid annual charges is to sign up for a credit card which does not have annual fees, and sometimes you might get a good deal, which you usually see on an annual fee credit card, such as rental car insurance coverage.
Interest Rate
You must pay a certain amount of interest to the credit card issuer to carry an APR balance (Annual Percentage Rate). Paying your debt fully and on time is the best advice to avoid these charges. The card issues offer a grace period of 21 days, between which you must pay your amount to avoid interest.
Foreign Transaction Fees
When you make a foreign transaction through your credit cards, most charge you a foreign transaction fee, usually from 1% to 3% of the total amount you are expending. Choosing a credit card without any foreign transaction costs is advisable to avoid such charges, such as travel credit cards, which usually skip this fee.
Balance Transfer Fees
When saving money by transferring high-interest debt to a credit card with low or zero APR, it can usually charge you a balance transfer fee of 3% to 5%. Ultimately, it adds more to your existing debt, so calculating it beforehand should be prioritised. Choose a card which charges a low transfer fee, or you could apply for a union credit card, some of which don’t charge you and sometimes have offers too.
Cash Advance Fees
You will most likely be charged a cash advance fee if you withdraw cash at an ATM through your credit card against your limit. This fee could be a percentage of the total amount you are withdrawing or a balanced fee for each transaction. To avoid such charges, first know that this way of obtaining money is rather an expensive choice; however, if you are really in a bind and have retirement savings, there are some circumstances where you are eligible for early withdrawal without any charges, such as significant medical expenses or educational reasons.
Late Fees
Repaying the debt amount after the agreed-upon time will lead to more charges, such as late fees. However, not all issuers charge this fee, but if your issuers do, you will have more added debt. Therefore, it is important to check the free CIBIL score regularly. Also, to avoid missing your due amount, use online means to pay your debt or set up auto payments.
Conclusion
Credit cards can be useful tools for those who want to make large transactions while keeping their financial matters good or in emergencies. Regularly checking your free CIBIL score is responsible for ensuring financial soundness. You should know all the relevant information regarding your credit card to eliminate possible risks while maintaining your financial health and getting the most out of your credit card. Always use an authorised CIBIL score app to check your credit score.