Check the Fees
In addition to interest fees, you should be aware of automatic and optional fees, so read the fine print!
- Transfer fees – Say you’re carrying a substantial balance and your APR is higher than the ones offered by other companies. If you open a new account with another company, they will normally charge transfer balance fees, usually 3 percent per balance transfer.
- Over-the-credit-limit fees – These vary. It used to be that if you exceeded your limit, your purchase might be denied. More often now, you’re likely to be charged a monthly fee each month until you pay it down. Worse, your fee can be a debit charge, so that it becomes part of the balance that accrues interest. So you actually may pay interest on the fee, on top of the amount of your balance!
- Finance charges – In addition to late fees, lenders usually tack on a finance charge.
- International transaction fees – If you’re lucky enough to travel abroad: good for you! But if you use your card while visiting another country, you may be charged a percentage of the transaction, whether you made the purchase in US dollars or in foreign currency. If you’re an exchange or international student in the U.S. and open a credit card account here, this rule still applies for transactions made in your home country.
- Fraud protection– With the rampant identity theft epidemic, your credit company offers a variety of security services, such as a Fraud Early Warning service that alerts you to suspicious activity on your account. While some services, like a Zero Liability program, are built into your agreement, others may cost a fee each month, either a fixed amount or based on your balance.