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?

• Interest Rate. For many cardholders, the biggest cost they pay to have a credit card is the interest on balances that they don’t pay off each month. A low interest rate should be the first consideration when you’re shopping for a new credit card, and the first thing to look at when you’re trying to evaluate your current costs.
• The Cost of Carrying a Balance. To some credit card holders, their interest rate isn’t something that they can easily relate to a monthly cost. But unless you pay off your balance in full each month, it’s absolutely essential that you understand how much you’re paying to carry a balance.
• Annual Fee. Does your credit card company charge you an annual fee? Unfortunately, because this charge only appears once a year on a person’s credit card statement, many people pay the charge, but don’t take any steps to try to reduce or eliminate it.

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• The Late Payment Fee. This can be one of the most frustrating and misunderstood fees that a credit cardholder ever faces. Even if you’ve had a spotless record of paying your credit card bill on time every month, being late on a single payment can trigger a fee that can be upwards of $50.

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.