Nobody likes to overpay on anything and least on credit card fees or charges. There are few things that people hate more than purchasing something and learning a couple of days later that they could have got the same thing for half the price. With credit card charges, the story is the same with the sole difference that you can have some control over what you are being charged for. Lets see how:
There are different things to take into account when analyzing what you pay with your credit card balances. There is of course the interest rate for financing with your credit card, administrative fees, issuing costs, late fees, balance transfer fees, overdraft penalty fees, etc. All of these vary from one credit card to another and comparing the different offers with your particular needs will help you obtain the credit card that best suits your budget.
APR Is An Important Variable But Not The Only One
The APR (Annual Percentage Rate) is an interesting variable as it gives an idea of the overall cost of your credit cards. It includes the interest rates and other fees and costs, like some insurances, etc. Yet there other variables that can not be contained in this rate and that also imply costs even if it is in a subsidiary way and should be taken into account when analyzing this problem.
A common cause for cost increasing on credit card charges are the penalty fees applied when you exceed the limits on your credit card or when you fail to make your credit card payments on time. These charges can be significantly high and sometimes are close to be abusive. Thus, you should do whatever you can to avoid incurring on penalty fees due to late payments or overdrafts.
Getting Rid Of Administrative Fees And Issuing Costs
It is possible to get rid of administrative fees and issuing costs. There are many credit card products that do not charge these fees and yet have similar or even lower interest rates than those cards that do. Thus, comparing different credit card products before closing on a deal is the smart way to go. Yet, if you already have a credit card, you can always apply for a more advantageous one and transfer the balance so you can close the previous account.
Also, some financial institutions that issue credit cards will eliminate these costs if you spend certain amount of money each month (on average) with your credit card or if you combine your credit card product with a checking account and a pre-approved personal loan in a combined financial product pack or combo. In any case, get information on the different products available and decide which one best suits your needs. Remember that credit cards are lines of credit and that it is easier for you to close them and open another one if you are not happy with the terms.
Avoiding Penalty Fees And Negative Inputs On Your credit Report
Avoiding penalty fees is particularly important not only because you will save money but because you will also impede negative inputs from appearing on your credit report. If you really can not afford the payment on a particular month, instead of paying late or missing a payment, you should take a small unsecured loan that is processed really fast and use the money for meeting your obligations and buying some time to recover from your lack of cash problem.
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