Do You Know How Much You’re Paying in Credit Card Fees?

Credit cards provide us with a great deal of convenience in our day to day lives. Instead of having to carry around our checkbook, or constantly run to the ATM to make sure we have enough cash for our shopping, we can just use a credit card.

In addition, you’re protected against unauthorized credit card use (even if it’s a bit of a hassle to get those protections), whereas if you lose a wallet full of cash then there’s a good chance you’ll never see that money again. Many credit cards also provide extended warranties on products that you buy with the issuer’s credit card. Of course, all of these things come at a price.

So do you know how much you’re paying in credit card fees?

Furthermore, most credit card companies have the right to significantly increase your interest rate to a higher “Penalty APR” or “Default Rate” that can be over 30% if you are late making a single payment on your card.

Some credit card companies make it easier to understand exactly how much it costs you if you only make the minimum payments each month. For example, your statement might contain a chart that shows you how long it would take you to pay off your current balance if you only pay the minimum payment each month, as well as how much you will end up paying in total. It’s not uncommon for the estimated total payments to be two or three times the amount of your current balance, and for the estimated repayment term to stretch for a decade or more, when you don’t pay off your balance in full each month,

Credit card companies compete with one another to bring in customers, so most customers are going to have broad range of deals available to them. This means that you should be able to find a similar no fee credit card, or call your company and request a waiver of your annual fund.

Once you learn more about how much you’re paying for your credit card, don’t be afraid to take your credit card business elsewhere if doing so can save you money.