The popular misconception is that credit cards are free. And that so long as the consumer pays the minimum there is nothing to worry about. This cannot be farther from the truth. This article will discuss several practical ways to reduce credit card fees.
A high or low credit score determines in large part what type and what particular credit card provider will offer you the facility of credit. Simply put, the higher your credit score the better the offer. This is in terms of credit limits, interest rates applicable, penalties, reward points, etc. However, even the most excellent credit score cannot prevent credit card companies from charging you interest and penalties when you default.
Pay On Time and In full
If you pay before and during the due date, and in full, then credit card companies cannot charge you interest and penalties. This is the most basic advice given to every consumer. However, this is easier said than done. Below are a few tips that should help you prevent a default:
- Pay a few days before the deadline. This way you do not fall victim to emergency expenses, and even the occasional inability to make it before a bank closes for the day.
- Auto debit: You can have your credit card fees automatically debited from your savings and/or checking account.
- Online account: By enrolling your credit card account online, you can make payments using other accounts, usually form the same bank, to make the payment 24/7.
- Take note of holidays and weekends. If your due date falls on a weekend or on a holiday, pay before the same. In some cases paying on the next business day is too late.
Annual Amount Charged
Most credit cards charge the user an annual membership fee. The higher the credit limit or more exclusive the card is the higher the annual fee. However, there is a way to have this waived. This is by charging an appropriate amount each year. If you meet that quota then the credit card company automatically removes the charge OR it can be easily removed with a single request. Contact you bank or lender, ask for the parameters on the same, and call every year. Do this one month before the month indicated on your credit card validity date.
Reward Points (good as cash)
By utilizing reward points you can effectively minimize any interest or credit card fees that you have paid. The same can be utilized to claim specific items or services, or it can be converted into virtual cash that will then be credited as payment on interests and penalties.
Negotiate with your Lender
If you already have a few defaults on your account, then you have already been charged interests and penalties. You can ask that the charges be reversed if you have a relatively good payment history with the same lender. You can site emergency expenses, hospitalization, loss of work, etc. Remember, sometimes all it takes to get a reduction of interest and/or penalties, is to ask for one.