By understanding all the rules and regulations that go along with having a credit card, you will be able to stay on top of your balance and make sure your credit score does not get out of hand. One of the things to look out for on a credit card agreement is any fees that are involved. Sometimes, a credit card issuer will have service fees that you may not be aware of. These can be detrimental to your balance and cause your credit score to get knocked down a few points. When getting a credit card, be sure to look out for these charges:
When you are planning an exotic trip to a foreign land, you should be mindful of how many purchases you make on your credit card. Many times, credit card companies will charge you a foreign transaction fee. Though it's usually a small percentage of the purchase – usually anywhere between 2 percent to 4 percent – these charges can start to add up. To avoid this costly charge, look for a travel credit card that will not impose this fee.
A high interest rate on a credit card can make it difficult to pay down your balance. If you are making consistent payments but struggling to lower your balance, you can consider transferring your balance to a card with a lower interest rate. Many credit issuers offer this option, but it usually comes with a fee – usually a percentage of the sum that will be transferred. If you have maintained a history of good payments with your credit card company, you can see if your issuer will waive this charge.
By missing a credit card payment, you will be charged a late fee. This will usually amount to $25, it was originally larger but the Credit CARD Act of 2009 capped it at the present amount. Making your minimum payments on time each month is not only important to decreasing your overall balance, but it shows your credit issuer that you are a responsible borrower. Being a diligent credit card user will also help you improve your credit score.
When you are in a pinch and need some cash to pay for something, you can use your credit card's cash advance option. Even though this can help you out in emergencies like your car breaking down, avoid this option when possible because you will be charged a percentage of the cash you took out.