Avoiding High Fees On Credit CardsIndividuals with problematic credit histories often suffer unfairly from high mortgage, insurance, and car loan rates. On top of that, they have difficulty getting approved for credit cards. The whole situation can get extremely frustrating.
Frequently, I get emails from consumers wondering what they can do to rebuild their credit. The first thing I tell them is to get a credit card designed for people with bad credit. The second thing I tell them is written in bold: READ THE FINE PRINT.
There are only a limited number of credit cards for individuals with bad credit. At first glance, many look the same. They all help build and rebuild your credit by reporting to the major credit bureaus on a monthly basis.They all provide you with the Visa or MasterCard you need to make many purchases.
And they are all necessary evils that can save you thousands of dollars in mortgage and car loan rates in the future. However, you must read the fine print before applying for one of these credit cards, as they often charge high yearly fees, set-up fees, and even monthly fees.
Here, I will examine a few examples of charges current “bad credit” credit cards bury in the fine print. Of the three major cards I will examine, only one stands out as consumer-friendly. A below mentioned points can keep you free from paying high fees on the credit card you have in your purse.
“Bad Credit” Credit Card #1:
This credit card charges a very low interest rate for an unsecured credit card. However, your first fine print glimpse reveals that there is a one time setup fee of $29. Not too bad. So far, since the next charge is a one time fee of $95.
So far, we’re up to $124 in expenses. That’s got to be it, right? No. Add in another $48 for the annual fee and $6 per month in account maintenance fees. That’s brings the cost of your new credit card to $244 the first year, and $120 each additional year.
This is no small change, and a card such as this should be considered only if you cannot be accepted for a better unsecured credit card for bad credit.
“Bad Credit” Credit Card #2:
This credit card charges a very high interest rate for an unsecured credit card. This can’t be good. But the setup fee is only $29. Maybe this card isn’t so bad. There is that pesky monthly maintenance fee of $6.50 per month which brings the cost of this unsecured credit card to $107.
Maybe we’ve found a bargain. Not quite. The annual fee is a whopping $150. Yes, $150 every year. That not only brings the initial cost up to $257, but you will also pay $228 a year just to maintain the credit card. There has to be a better offer.
“Bad Credit” Credit Card #3:
This credit card is available as both a secured and unsecured credit card, based on the issuer’s review of your credit history. The interest rate is average, even competitive. Now, the fine print reveals that there is a one time setup fee.
However, based on your credit, this fee can be as low as $0 or as high as $49. So far so good, especially if your credit is not that bad. But, there must be a huge annual fee. Not exactly. The annual fee for a secured credit card is only $35, and for an unsecured credit card, this fee can be as low as $39 or up to $79.
So far, the cost of this card ranges from $35 to $128. Now its time for the monthly maintance fee. This one has to be huge. Or not. Its $0. That means the most you could possible be charged to obtain this credit card is $128, about half of what competing cards are charging.
Clearly, there are substantial difference between “bad credit” credit cards. Of the three offers we have examined, only one doesn’t take you to the cleaners. In fact, “bad credit” credit card #3 provides great value. Beware of high fees you pay on your credit card you have.
All positive changes to your credit history and credit score will translate into lower loan rates, lower credit card interest rates, lower insurance rates, and ultimately, thousands of dollars in savings. The path to rebuilding credit has its costs, Understand correctly the fees your bank ask for to pay fees.
But in the long term, rebuilding your credit with a “bad credit” credit card is the fastest and most cost-efficient way to correct the often unfortunate circumstances that have damaged your credit in the first place. Gain the knowledge while you purchase a new credit card before you want.
It is better to do some research on different banks before you need a credit card. Compere different banks and fees these banks own before you buy a credit card. Select a Bank which have less fees they charge on credit card you want to apply.
Beware of high fees on credit cards. Make a right and effective decision on purchasing a new, effective and budget Credit Card. Purchase the Credit Card if required. Dont spend unnecessary and undependable pennies on Credit Card.