Credit card users who haven't bothered to read the fine print in their cardmember agreements could be paying more than they expect, should they incur a late payment fee.
Credit card issuers occasionally update their rates, fees, and penalties, so it requires ongoing diligence to stay informed. Disclosures that were a single page one decade ago now can total 20 pages, on average. Late fees, while hardly new, have increased markedly since the mid-1990s to about $30 on average, and often reach up to $39.
At the same time, other types of credit card fees are important to consider. balance transfer fees are fairly common, which generally amount to about 3% of the transfer amount. The good news is that most credit card issuers cap balance transfer fees at $75, which can make transferring a large balance considerably less painful.
Looking ahead, some credit card issuers are considering a fee for cardholders who pay off their balance in full each month, according to experts. This is because so called "transactors" are unprofitable for most issuers. Additionally, some card issuers are considering interest rate increases automatically triggered by a credit rating decline, even if cardholders make payments on time.
What is a credit card user to do? First on the agenda is a yearly review of their credit cards, especially each card's APR. Find out the reason for rates above 14% by calling the credit card issuer. Be on the lookout for recurring fees. Although the card may have initially been a no fee credit card, a fee could have been added on at some point. Beware of fees for exceeding the card's credit limit and for making payments by phone.
Once fees have been identified, ask the card issuer to have them removed. A good customer may be able to get them reversed one or perhaps even two times. Also be sure to make at least the minimum payment well before the due date if you're not able to pay the balance in full.
While staying on top of credit card fees is not easy, it is worth the trouble in order to save your hard earned money.