What are the charges are imposed when you are applying or using a credit card? Usually, annually fee and interest charges are the only fees you will need to pay. However, did you know there are more hidden charges when you use credit cards that most of the banks and credit unions do not tell you?
There is a saying that goes, “What you do not know is costing you”. The same goes for the credit card world. If you do not know about the untold charges when you are using credit cards, you might find it really difficult to accept when they really start to charge you.
So what are the hidden and untold charges when using a credit card?
Late Payment Fee
The late payment fee is the fee you will need to pay when you make your credit card payment late. For example, the due date is on the 20th August and you only pay on the 28th August. This is how a late payment fee works.
When you delay your payment, you will also need to pay for the interest being charged on top of the late payment fee. So in order to avoid late payment fee, you will have to find a way to make your payment on time.
Balance Transfers
Existing credit card rates are way too high and people simply cannot afford to pay for the balance in full. So in order to avoid this, consumers start to move their existing credit card outstanding balance to another just to get a lower interest rate.
Though the process is easy, it does not come free. A fee will be charged and it is worth doing if this is what it takes to have a lower interest rate charges in the future.
Conversion Fee
Have you been using your credit card outside your country? If you are in Malaysia, the moment you swipe your credit card, you will be charged in Ringgit Malaysia (RM) currency. However, if you are in the Europe, your credit card will be charged in Pounds or Euro currencies.
The real deal happens when you come back to Malaysia from Europe. The moment you want to pay your outstanding balance of your credit card, you will be charged a fee for converting Euros or Pounds to Ringgit Malaysia.
Closure Fee
Too many credit cards and you want to get rid of some of them? Easy. Go to the bank and terminate the credit service. However, the banks are smart and they would not let you go just like that. They will want you to pay a fee before you stop using their credit card services. This is what they called the closure fee.
Inactivity Charge
Sometimes things in the world are just ridiculous. You are not only charged for using the credit card but when you are not using the credit card, they will also charge you. When your card is inactive for a period, the bank will charge you a fee and it is called the inactivity charge.
Now you already know all the hidden fees and charges the banks will not usually tell you. You are one level wiser in using the credit card.
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