Is your credit card costing you more money?

Many people do not give a deeper thought on the credit card they use and the associated costs involved with it. While you may be aware of the charges and interest rates before applying for the card, there are other hidden fees and charges mentioned in the fine print and often many of us don’t review it carefully. You could end up paying hundreds of dollars in such charges before realizing it. If you have done a strong budgeting on your finance, the hidden credit card fees can be real drain on your finance. Here are few tips that will help you to understand the fees structure of the credit cards and steps to avoid them.

Every credit card account has a grace period after the due date and you can pay the amount without accruing additional interest rates or fees. Nowadays many credit card companies are wiping off this grace period and this means that if you are even one day late, you will be charged penalties. These penalties along with the interest rates and fees will be excessively high and it can be double the amount you already spent on the card. Check the fine print of the credit card company very thoroughly. If there is no grace period mentioned on the papers, then you should look for another company that is more user friendly.

Late fees add up very quickly. Be sure that you know about the late fees of your credit card company and the circumstances under which it is charged. The late fees were not so costly earlier. It has increased dramatically in the past several years. And if the credit card company is not offering you a grace period, then you will be spending a lot just on the interests and fees. Be proactive. Try to pay your bills on the same day when you have got the statement from the credit card company. This way, there will be a less chance of forgetting about this payment and missing the due date. Once you are late on your payment, the credit card company will report to the credit bureau and you will see a negative remark on your credit report. If the interest rate was less while you applied for the credit card and now if you got late in your payment once or missed it, there is a chance that the interest rates will be increased permanently even if you pay your bills with the next due dates. Read the fine prints carefully

Your finance will be in good shape if you know about your credit card charges thoroughly. It is in your hands to keep the interest rates on your credit card lower, and avoid the hidden charges, late fees. The amount you save here is the amount you can keep aside in your savings account and do some mutual funds investments. Managing your credit wisely is the key to your financial stability. Make sure that you understand the terms and conditions of your credit card company thoroughly. You should have the same knowledge about your other revolving accounts like car loans, student or installment loans. By making your payments on time and in full, you will be saving a lot for your future and live comfortably.