How to avoid credit card fees?

Few things are as irritating as having to pay fees to the bank, especially if it's something they can't justify. Well, when you have a relationship with a bank, these expenses are your daily bread because they represent a huge income for the entity.

If you want to know how to avoid annoying credit card fees, we tell you our secrets.

All of us who try to manage our personal finances better understand that the big problem of banks are the insufferable charges. These can be hidden in the contract or explained in the Schumer box.

Although many of these fees are contingent on paying the balance in full, it's important to know what you can do to avoid them. At least one-third of Americans who have dealt with this problem checked these suggestions to avoid incurring these fees:

Late payment fee

It may seem like a simple thing to avoid, but many people are not vigilant with their credit cards and fail to pay the minimum required. This penalty can be costly if it is repeated more than once.

May interest you: What to do if your card is lost or stolen?

If you don't want to pay between $30 and $40 for this fee, get a plastic that doesn't apply it, use the automatic minimum payment or get organized to remember to pay the monthly fee on your card.

Cash advances

Taking money out of an ATM is the last thing you should do when using a credit card (barring an emergency), unless you can get it by debit. Banks gloat when they see that users don't understand the cost of this action.

When in need of cash, use other methods that do not charge you 2-5% of the amount you are withdrawing or a flat fee of around $20-25 each time you bleed your funds. The best option is to use a debit card or withdraw the money over the counter.

Balance Transfers

This option can be an interesting resource for savings if you understand how the process works. Often, people don't do the math right and end up paying more than they should.

This is because the transfer usually costs 2-5% of the amount you transfer to another credit card. The simple solution: look for a plastic that does not charge you or that offers a promotional period to do it for free.

Overdraft fee

As you know, the bank assigns you a fixed amount to use at your convenience. When you exceed that limit, you are usually charged an over-limit fee, which varies from $20 to $40.

The issuer of the plastic allows you to accept or not accept this fee. If you do not, the transaction is rejected and you are not charged. You can also try to plan ahead and keep an eye on your balances.

Foreign transactions fees

As its name suggests, this is a charge that is applied when you use your card outside the country and pay in a currency other than the dollar. While it may seem silly, the 1-3% percentage on the amount can add up quickly, especially when you're traveling.

If you are a frequent traveler or this expense is a priority for you, there are several credit cards on the market that do not include this fees.

Returned payments

This fee can occur on 2 different occasions: when an automatic payment that comes out of your account is returned for insufficient funds or when a check intended for your bank to pay the card is returned.

May interest you: PNC Bank credit cards reviews

According to the law, this can cost you $28 for a first offense and $38 for a repeat offense within 6 months. If the check is returned before the due date, you will not be charged the fee if you pay on time. Try to watch your finances and control your spending so that this does not happen.

Recovering rewards

There are some issuers and banks that charge you a fee when you reactivate promotions that have already expired. The first solution consists of knowing the terms of the rewards and using them within the stipulated period, preventing the points or miles from expiring.

The second option involves moving those rewards to a program that does not expire. This has its disadvantages, such as reducing the value of the points.

Finance Charges

This category is not considered a fee, but we feel it is important to include it for educational purposes. This is the interest assigned to the balance you leave when you do not pay in full what you owe on your credit card.

The finance charge is a term that may appear in the contract, so it is useful to know it. If you don't want to be charged this interest, pay the balance in full whenever you can.

Like you, we hate it when banks demand payments for seemingly insignificant things. This can be avoided with knowledge, organization and the most convenient credit cards, which you can easily find in our Busconomico comparator.

Español: Cómo evitar las comisiones de las tarjetas de crédito