November 3, 2009
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Becoming Savvy About CC Fees, Pt.2
How did that happen?The over-the-limit fee can come as an even bigger surprise than the late fee. There are a several ways your account can be pushed over the limit. Of course, spending more than your credit card limit is the obvious; but what you might not realize is that a late fee can also generate an over-the-limit. That's right. If your credit card company gets your payment just one day late, it will generate a late fee of anywhere from $35 or more. If you were within $34 of your credit limit, the $35 will push you just $1 over your credit card limit. The $1 over the limit now generates an over-the-limit penalty which can run another $35 or more.
You can avoid the over-the-limit fee by keeping a close eye on your card balance. Most lenders offer text messages or email alerts that would flag your account when you are in danger of reaching your account limit. You can check this out online as well. Of course, you need to remember that it can take up to two weeks for some credit card transactions to post. You should be diligent in making sure you are keeping up-to-date records of all your transactions to avoid any over-the-limit fees. Remember it is not the responsibility of your credit card company to keep track of what you're spending.
Then there's the hidden monthly fee often called a minimum finance fee. Some lenders may tell you that you have no annual fee, however, in credit card's contract and in small print you might see a monthly service fee or minimum finance fee anywhere from $2 to $6. It might seem petty to worry about a two dollar monthly fee, but that adds up to $24 to $72 a year. What to do? Look for a card offer that doesn't have this hidden fee.