Bad Credit Gone

There are some cunning credit card holders who have managed to avoid paying out on unexpected credit card fees.

Most people will agree that these fees are too high, and equally that penalties are unfair. It is commonly known that banks and other credit card providers make significant amounts of money from these fees. Take last year for example, the Reserve Bank of Australia (RBA) saw a 12% increase in credit card fees compared with figures from the previous year, and by a staggering 170% when compared to 5 years ago.

The RBA also found that fees that came from common breaches of contracts such as exceeding credit limits, paying for transactions made abroad and failing to pay bills on time rose the fastest in 2007 by 16%.

These fees are easily avoidable, so you may be paying out unnecessarily. It is important to fully understand the wide variety of possible fees, giving you the best chance of steering clear. If you find your credit card features are not very competitive when comparing against other credit cards on the market, you may benefit from switching cards and you can even transfer your existing balance across and pay no interest for a specified period depending on the card you choose. For this reason, it definitely pays to compare credit cards to find the one that best suits your spending needs.

Below are a list of steps that you can follow to help you to minimise, or even avoid credit card fees:

The golden rule when using credit cards is to always pay your bill (at least the minimum payment) on-time without fail. Also, if you plan to make a transfer or pay using online banking facilities, make sure you do so a few days in advance (check with your provider) as these transactions can sometimes take longer to process. Fees can vary greatly, but usually range between $25 and $30, a high price to pay for something that can be easily avoided. The best way to prevent yourself from being charged is by setting up a direct debit from your current account to ensure your bill is always paid well within the bill due date.

When choosing a card, reduce the additional cards to the number you require. These are  supplementary cards that can be given to a family member of friend, but can add extra card fees on top of your bill, especially with reward credit cards.

By comparing credit cards you are able to decide how much annual fee you wish to pay. Cards that offer no annual fee tend to have higher interest rates, sometimes with no interest free days, which means that your balance would be subject to interest as soon as a purchase is made. Alternatively you may have to spend over a certain amount to avoid the annual fee.

Cards that come with rewards programs often have higher annual fees than regular cards, so you need to find a balance between how useful the rewards are and how high the fee is.

A general rule of thumb is to stick to just one or two credit cards, as it makes everything far more manageable, such as monitoring bill dates and monitoring transactions. This will also help you to keep annual fees down.

Try to avoid using your credit card to withdraw cash. Cash advances generally begin accumulating interest on the day they are made, even with interest free days (these are for purchases only) and most banks will also charge a fee for each cash advance.

One of the key ways of avoiding credit card fees is simply by staying within your limit, as these are high charges that may be completely unnecessary. By keeping up to date on your balances and knowing exactly how much money you can use, you can always ensure you don’t go over your limit. This can be done using internet banking so you can regularly check your account, or  you may prefer to use other banking facilities such as ATMs, telephone banking.