Take A Mindful Detour: Credit Card Fees You Should Avoid

Credit card accounts are complicated beasts. Undertaking the application process through to comprehending the usage and payment terms can leave your mind boggled. The fine print in a credit card agreement often describes various unexpected fees which can actually be avoided if the user manages their credit card wisely. Because, with an average of three cards per person in Singapore, these fees can add up. Here is a sampling of fees that you can easily avoid racking up – and how to maneuver around them.

1. Credit Limit Increase Fee

This fee is exactly what it sounds like. It is a fee, sometimes as much as $50, that credit card companies charge to increase a user’s credit limit. This is absurd, especially considering that a credit limit hike can actually do more harm than good to the user in the long run. The amount of the fee may depend on your longevity as an account holder with any given credit card company, so it can vary greatly.

2. One-Time Processing Fee

The idea behind this fee is simple; it is the fee that certain credit card companies charge to allow you to use your card for the very first time. What is ludicrous about this fee is that it can be upwards of $90 or more, and you are obliged to pay it just to use the card they issued you. It is extremely customer-unfriendly, and in reality, quite unfair to new cardholders. It is, however, a one-time fee, so you never have to pay it again.

3. Copy Fee

A copy fee is charged by some companies if the credit card holder should request a paper copy of their monthly statement. Many credit card companies actually do this, and this particular fee can be anywhere between $5 and $25, depending on how far back in time that particular statement’s date lies.

4. Account Reopening Fee

This particular fee is charged to people who close their accounts but later decide that they want to reopen them. The amount of the fee can vary from one company to the next, but it is pretty normal to pay around $25 just to become a customer of this particular company again. If your credit card company does charge this fee, it would be a good idea to consider whether you really want to be a customer with them again or not.

5. Authorised User Participation Fee

Most card companies out there do not charge this fee to their customers. It involves adding an authorized user to a card account. This additional user may be a representative using the card if you are indisposed, or it may simply be a second cardholder on your account. Some card companies, though, will charge their customers an annual fee to continue this authorization long-term. If you are looking to add a user, check whether your company charges this fee before you do so.

6. Alternative Payment Method Fee

Everyone knows that there are many ways to pay your monthly credit card balance; internet, check in the mail, or by phone. But what some people don’t know is that by paying over the phone, you can actually be subjected to a fee. Some companies charge you around $20 just to process the payment by phone instead of online.

No one likes to pay unnecessary fees to credit card companies. It’s as simple as that. The real problem is that sometimes you’re not aware of these fees until it’s too late, and by then you have no more choice in the matter. One way of protecting yourself against nasty extra fees is to ensure you read all of the fine print on the application. You should thoroughly understand the terms and conditions of that credit card before you sign on the dotted line. This will help save you a lot of time, trouble and headaches further down the road.

Knowing just what to expect when applying for your card will help you maintain a solid credit history with your credit card company while also making sure that you don’t rack up any unnecessary extra fees. By doing this, you can rest assured that you’ll have few worries with your new credit card.