Getting ready to apply for a credit card? The first and most important question you should ask is how much does a credit card cost?. This is to help you decide whether you want to use a credit card for your financing needs or opt for another form payment method.
Credit card cost differs depending on the credit card and how you manage the card. You may use the card free of charge or pay a fee for using it.
The cost of your credit card all depends on you and the card issuing company. The first thing you have to do is learn the fees associated with your credit card, so you can adjust your credit card habits to minimize the cost you have to pay for your credit card.
Credit Card Cost | You Can Use a Credit Card for Free
You can use a credit card for as long as you’re disciplined enough. The first thing to do to avoid this cost is to choose a credit card that does not have an annual fee charge. If credit cards charge an annual fee, it’s unavoidable and automatically increases the cost of having a credit card.
When you are picking a credit card, review the pricing details to learn which transactions will incur a fee. Cash advances, balances transfers, and foreign currency transactions are the most commonly charged a credit card fee. You must know these fees before you start using the card.
Use Your Card Responsibly
After you applied for and received your card, the next thing to do is to use the card in a way that eliminates fees. This you can do by paying your balance in full each month, to avoid any interest. In the event of any default, you’ll be subject to a finance charge. You can only be exempted from this rule if you have a 0% promotional rate on purchases and you use your credit card for purchases. Note, even though some credit card offers a 0% promotional rate on balance transfers, any balance transfer fee will increase the cost of the credit card.
Another thing you must be careful to carry out religiously is to always pay your balance on time to avoid incurring a late fee. If your card charges a foreign transaction fee, make sure you don’t use that card when you’re traveling out of the country.
Annual Credit Card Cost
Everyone does not have the option of using their credit card for free. This is because if you choose a credit card that has an annual fee charge, the fee gets automatically charged to your card each month. Since most issuers waive the fee in the first year enabling you to enjoy your card for one year free, you can cancel the card after the first year to boycott the fees.
Annual fee charge ranges from $30 – $500, depending on your credit card. Higher annual fees are synonymous on credit cards for people with bad credit and premium credit cards for people with excellent credit.
You can actually dodge those credit card fees if you act wisely. Simply read your credit card statement each month because your billing statement breaks down all the transactions that have posted to your account, as well as any fees or interest that you have attracted.