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Shady credit card fees that customers should be wary of
[12:00:00 AM Friday, December 24, 2010]
Credit card comes to our rescue many times during emergency or critical situations when we don's really carry cash. But the same card could cause us a lot of stress too at other times. This stress is not only when we default a payment but also in the form of other factors less obvious, like the hidden fees on credit cards. The recently passed Credit CARD Act aimed at easing some of the financial burden of customers holding a credit card, by putting limits on the fees that you incur and by making the credit card transactions more transparent. However, before credit card customers could feel relieved, there are a lot of caveats. This is because many credit card issuers are following and succeeding at going around the rules. Another way they are making up for lost revenue is by charging new types of fees and penalties on the customers. Sadly, these new types of fees are legal for now, and hence, as a customer you will have to pay it.
However, knowing about these hidden fees will help you avoid these penalties to certain extent or keep them at a minimum. A good example would be a change in the mailing address with the credit card company. Rerouting the bill to your place might take the grace period out, and you might be facing the late fees and an increase in interest rate too. You can however, negate this trick, by calling the company and verifying the payment address a few times. Some of the card issuers will even take the time into account for charging late fees of up to 35 dollars. You can avoid this by checking the time on the statement or paying the bill in advance.
The annual fee is also back on credit cards. The inactivity fee is not allowed by law now. Therefore it has been renamed as the annual fees. Similarly when you ask for a hike in the credit limit of your card, the company will assess your credit history before approving. If they indeed increase the credit limit, you will be charged up to a whopping 50% of the amount by which they have increased your credit limit. Another example is the statement fee, which is the amount that the customer will be charged for receiving the monthly statement in the mail. You can avoid this by writing to the company that you don's need a paper statement anymore.
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