Consumer News
The Hidden Costs Of Credit Cards
By
Sep 20, 2007, 22:00

Most everyone I know has a credit card, in fact, they have many credit cards. I have several myself. I remember when credit cards first came out. Back then most people thought they were silly.

Who would pay interest to someone so you could spend money, when you could just spend money. We thought of it as a loan, and if you needed a loan, why not just go get one. The most frightening thing is that wasn't all that long ago.

Now, we all live through our credit cards. People hardly ever have any cash, they just charge it. We certainly don't seem to think of it as a loan. There are many hidden costs involved with credit cards and I am not sure that we think about them at all.

Most of us probably don't even notice the extra fees involved with our credit cards until it is too late to do anything about them.

People who use credit cards and aren't aware of the hidden costs involved can end up paying hundreds, even thousands, of dollars in the end and not even realize it.

Rewards on cards that we have racked up through constant use of the card can be eaten up by these hidden costs. Of course, there are many credit card users who know all about these fees, but many more who don't.

The grace period is one of these hidden secrets about your credit card. A grace period is like an extended pay date on your credit card. It is time you get to pay for your credit card bill that can buy you a week or two before paying a late charge on your payment. The downside to this grace period is your interest can accrue, and you will owe more interest than you originally planned.

Another fee that is usually overlooked about your credit card is the late fee. Late fees are charged to the credit card owner when your monthly payment is late. These fees can add up to a lot of money during the course of the year if you do not make your payments within the time allotted.

The best way to avoid paying any hidden fees is by always pay your credit card bill on time. As soon as you get your statement in the mail, or online, send it right back out with the payment. If at all possible you should pay more than the minimum payment.

You will pay your balance off faster and save money on the extra accrued interest. Try never to pay your credit card bills late. In fact, the credit card company or bank, can increase your interest if you make late payments. It will also adversely effect your credit rating.

The best solution is to attempt to use your credit card as little as possible, or pay it off completely every month. You will save a lot of money by doing so. The credit card company or bank is not going to be forthright and tell you about the fees they have worked so hard to hide from you, unless you ask them directly.

These fees add up to millions of dollars a year in profit for the credit card companies. Why would they tell you about them, after all, they exist to make money.

To protect yourself, your money, and your credit rating, always make sure to find out what costs are involved in your credit card in different situations. How much are late fees. How much is interest. How much interest will you add on if your use the grace period instead of paying your card payment on time.

You can prevent these charges from adding more debt to your life by just being aware of what they are. Be smart. Protect yourself and your credit. Ask your credit card company about all fees involved with the card they issue you, and then you can decide for yourself whether it is financially smart for you to use it.

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