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Credit Card Fees
Being financially savvy with your credit card takes organization and knowledge. However, the benefit is that you will rarely be shocked or surprised by an unexpected credit card fee on your next billing statement. New laws put in place under the Credit Card Act of 2009 have completely changed the credit card fee game and have done so to the consumers benefit. However, it's still money smart to understand these rules and have a clear understanding of how your card will work.
- No need to search through the microscopic credit card agreement for inactivity fees as they are now a thing of the past. The Credit Card Act of 2009 eliminated credit card companies from charging fees for non-use of a credit card.
- Despite much confusion, overdraft fees may still be applied to customers account but only in certain situations. The consumer must tell their credit card company they can allow transactions over the credit limit. If those occur, a credit card company can access a fee. However, if you don't accept the option to opt-in to overdrafts, a transaction that would take you over the account limit will be denied. However, if the company chooses to allow a transaction that will take your card of the limit they cannot access an overdraft fee.
- Annual fees may not be greater than 25% of the initial credit limit. Many companies charge anywhere from $50 to several hundred in annual fees. Being aware of what your credit card fees are is important to managing your finances.
- Application fees may also not be greater than 25% of the initial credit limit.
- Very importantly, late payment fees (also called penalty fees) cannot be greater than $25. However, if this is your second late payment in six months the company can charge more. Also, if the credit card company can show it cost them more than the $25, as a result of your late payment, they can charge more to the customer.
- Credit card companies can no longer charge you new fees or change the amount of fees without first notifying you 45 days in advance. If the credit card company is going to change the fee terms to your account they must give you the option to cancel your card before those fees are accessed. Cancelling your account will mean you are not charged the new fees but you may no longer use the card and may be required to pay off the balance in a much shorter period.
Looking for a low fee credit card is the best policy to limiting unnecessary charges throughout the life of your credit card. Also, making sure payments are made on time and spending is within your credit limit will decrease unnecessary fees.
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