Sick Of Paying Bank And Credit Card Fees - How To Avoid

Sick Of Paying Bank And Credit Card Fees? Here's How To Avoid 3 Of The Most Common - By Steve

Banks, credit card companies, and other businesses love to charge you fees for violating their rules. Whether it's late fees, ATM fees, check stop-payment fees, overdraft fees, bounced-check fees, or any other fee, businesses are determined to get every dime out of you they possibly can. But there are ways you can avoid paying these fees. You just have to be shrewd. Here's how to avoid paying three of the most common fees.

1) ATM Surcharges -- Any time you use an ATM that doesn't belong to your bank, you're going to pay for it. Sometimes the charge is only a dollar. But it can be as high as $4 or more, depending on the bank. And sometimes your own bank will charge you for using another bank's ATM. That makes for a really expensive withdrawal.

How to Avoid -- The best way to avoid these fees is to plan ahead and withdraw money from an ATM your bank owns. But you do have another option. Many grocery stores, drugstores, and discount stores (such as Wal-Mart) will allow you to get cash back from the register when you use a debit card to check out. The bank you use typically won't charge you for these transactions.

(2) Credit Card Overdraft Protection -- Many banks offer a credit card to protect you from overdrawing your checking account. But the protection comes with a price. While the fees are usually cheaper than overdraft charges, they're still expensive. Most of the cards will charge a fee each time the protection is used (up to $20 per transaction). And they count the transaction as a cash advance, which almost always carries a higher interest rate. To make matters worse, the transaction begins to draw interest the day it's made. There is no grace period.

How to Avoid -- The most obvious way to avoid this is to keep enough cash in your checking account to make sure you never overdraw the account. If that's too difficult, put some money in a savings account and set it up as your overdraft protection. Just make sure you put the money back as soon as you can. Otherwise, you'll deplete your savings.

A Word of Caution -- Many banks will charge you a hefty fee for overdrawing your account. And they'll charge the fee each time you do it. So if you use a check card or debit card to purchase small items, such as coffee or meals, each purchase that overdraws your account will rack up another $30+ charge to your account. Before you know it, you're charged $150 without even trying.

(3) Credit Card Late Payment Fee -- When you use a credit card, you have to make a payment by the due date. If you don't, the credit card company charges a huge fee (up to $39), and it damages your credit report. Even worse, credit card companies do everything they can to make you late for your payment. For instance, they have the due date on Sunday. But the company is closed on Saturday and Sunday. So the payment is actually due on Friday. If you plan to have your payment arrive on time, the mail won't arrive until Monday -- and you get slapped with a late fee. They also change their mailing address with no warning. If you make payment using auto-bill pay, you'll mail the check to the wrong address. And the company won't give you credit for the mistake.

How to Avoid -- If your bank offers a bill-pay feature, see if it also accepts electronic bills directly from your credit card company. If so, you can sign up for electronic billing and then set up your payments to be paid either immediately upon receipt of the bill or by the payment due date. Either option will allow you to avoid late charges. If electronic bill-pay is not an option for you, you'll need to make your payments early or get rid of your credit cards and use cash only. Actually, there's one other choice, but not many cards offer it. Some credit cards will let you sign up for the company to withdraw the full amount due on the due date from your checking account. I don't like the idea of giving them access to your checking account, but it's usually better than paying late-payment fees.

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Get Out Of The Trap...now!

“If you can't stand the heat, get out of the kitchen!” That aphorism should be inculcated in the minds of every credit card holder who collectively amassed about $800 billion in debt . Some financial analysts have tagged it appropriately as a “debt trap”. Are you one of those victims?

Finding ways to pay these bills can be worrisome. When you have a long list of unpaid credit card bills, this can put a lot of pressure to yourself. We think of ways of how to pay the bills or we ignore them and give more priority on our other expenses. Then comes another sets of bills, and another... and these bills have piled up in front of you. You again think of other means to pay the generating interest of your credit card that now has become overdue. To pay the bills, you apply for a new loan from another credit card company --- until you find yourself trapped in the debt cycle. Needless to say, being in financial trouble can be stressful. So how do you manage it?

It is perfectly normal to experience stress. Being under emotional distress is a normal human reaction. it just simply happens to most of us. But there are people who seem to handle stress quite gracefully and some can't get rid of it. A study of stress was done to a group of executives and it showed that top executives have shown lower stress signs while low and middle level executives show many stress symptoms such as high blood pressure, gastritis and tension. According to the research, probably the main reason is that the top executives have learned how to handle the pressure without letting eat them up. But, you don't have to be an executive to manage stress, it can be learned by even ordinary people like us, most especially big time or multiple credit card holders.

When we use our credit cards, we tend to be carefree and not realize how the interest rise up if we can not pay it on a timely manner. When the overdue bills come raking in, and we do not have money to pay for it, then the “danger alarm” begins to activate in our brain. Stress is like the alarm that was turned on during a “dreadful” situation. To beat the stress, we somehow must learn how to manage stress.

So, how do you learn stress management? There are two things that must be learned according to experts; learn to do various relaxation techniques and learn not to put the “danger alarm” on in your life.

Relaxation methods such as deep breathing, visualization or muscular relaxation. There are numerous books available related to relaxation techniques. The net is also an easy access to get information on these methods. Try these methods and see which works better for you. These techniques can easily be learned and gets better results.


However, learning not to put the “danger alarm” on in your credit card life can be a heavy task. If you can stop from unnecessary window shopping, then you might as well be going on the first steps of turning off that alarm. Change your lifestyle, buy things that are important and as much as possible do not buy something that you can't pay full come billing time. If you are tempted to buy something that is too expensive that will maximize your credit limit, learn to say no or alarm signals might turn on in due time.
Bottom line is be a responsible consumer. If you feel the urge to use those tempting credit cards and is beyond your limits, scram!, or you might be burned alive in the kitchen.

We strive to provide only quality articles, so if there is a specific topic related to credit card that you would like us to cover, please contact us at any time.

And again, thank you to those contributing daily to our credit card website.

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How Are Finance Charges Calculated?

Whether you are shopping for a new credit card or wondering about the one that you may already have, knowing how to calculate the finance charge applied to that card is important. First, however, it is equally important to know what finance charges really are.

A credit card finance charge is the amount of money that you pay to the credit card company in order to use their credit. This is not the same as the purchase amount balance. The purchase amount balance is the dollar amount of the purchases that you made using the card. If you pay off the purchase amount balance within the stated amount of time that the company allows, you will have no finance charges applied to the amount. It is when you carry over your balance that finance charges are triggered and added to your account.

Finance charges are calculated using the amount of your outstanding balance and APR. The APR is the Annual Percentage Rate and all credit cards use them to figure finance charges. It is important for consumers to understand that the ARP can vary from one company to the next, and it can even vary within the same company. It is for this reason that consumers should always look for the companies with the lowest APR's. This will save you money in the long run.

There are several ways that credit card companies can calculate the finance charges that they apply to consumer credit. Many people do not realize it but the method that is used can make a difference in the amount of money that you will have to pay. Here are some of the methods that credit card companies use to figure finance charges on your outstanding balance:

They can calculate using one billing cycle or two billing cycles.

They can use the adjusted balance, previous balance, or the average daily balance.

They can exclude or include new purchases in the balance.

You will normally find that you have a lower finance charge when the company uses what is known as one-cycle billing and uses the average daily balance

method which excludes new purchases. Much of this, however, depends on the balance and the time of the month that you make purchases and payments.

The next lower finance charge method is the adjusted balance, followed by the previous balance method. You can see which method the company is using by reading the bill that you receive. This information is usually contained on the back side.

It is also important that you understand that some companies will have a minimum finance charge system. When a credit card company uses this system you will be charged that set amount even if your calculated finance charge is less than that amount.

Of particular importance to some credit card holders are the cash advance programs that come with some cards. Consumers should be very careful when using credit cards for cash advances. Many companies that offer cash advances treat those advances differently than they do purchases. Before you use your credit card for a cash advance, make sure you look for the details of how you will be charged for that advance.

You will certainly want to know what the APR is for cash advances. Keep in mind that this may be significantly higher than the APR that is used for purchases. You should also investigate the fees that may be applied to the transaction. Fees are in addition to the finance charge that you will have to pay.

Lastly, find out how your payments will be credited. Some companies will apply your payments to your purchases first and then to any advances in cash that you have taken.

Use your credit card wisely and keep track of your finance charges and you will enjoy your credit more fully and avoid some of the pitfalls that many consumers experience.

Peter Kenny is a writer for The Thrifty Scot, please visit us at Bank Charges and Best Credit Cards
Visit http://www.thriftyscot.co.uk

We strive to provide only quality articles, so if there is a specific topic related to credit card that you would like us to cover, please contact us at any time.

And again, thank you to those contributing daily to our credit card website.

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0 apr credit card

When Not To Cancel Credit Cards
We have an article that details the benefits of canceling old, unused credit cards, but is this always a good idea? The answer to that is no. There are times when keeping a credit card line open is actually more beneficial to your overall credit health than closing it.

One occasion when you might want to hold off on canceling those older credit cards is when you plan to apply for a major loan. Major loans include such things as a home loan, car loan, boat loan, or other loans in excess of a few thousand dollars.

The reasoning behind this is that closing credit line accounts, especially those that you paid on time and in full, can actually lower your credit score.

Paying down accounts that still have a balance is important to your credit score, but simply closing paid off accounts will not help you improve your credit score at all. As mentioned above, canceling a large amount of unused credit may actually hurt your overall credit score.

You may be saying to yourself: That doesn't make sense!

Here is how this works. It has to do with how credit bureaus calculate your score.

The reporting agencies use many different factors when figuring out your credit score and one of the factors that they use is the total amount of debt you have on your credit cards and the revolving accounts that you have divided by the total amount of debt available on those accounts. Once these calculations are done, a number less than 1 (one) will occur.

This fractional number is one way they use to judge your credit worthiness. The lower this fraction is the better. To help

you better understand this, if the resultant number was exactly 1, then that would mean that your outstanding debt is equal to your available credit and you would be at the maximum level, or maxed out for credit.

For example, if you had $5000 in current debt and you had $15,000 in your various credit lines, you would divide $5000 by $15,000 and you would get 1/3. This means you are currently using 1/3 of the credit that is currently available to you.

To take this a step further: If you cancel an old credit card that has a $5,000 limit (but no current balance owed on it) you will still have the same $5000 in current debt (see above example) but you only have $10,000 in your credit lines (as compared to the $15,000 mentioned above). When you do the math you come up with the fraction of ½. In other words, you are using ½ of the credit that is available.

Keep in mind that the closer you get to the number 1, the less attractive you are for future credit.

The best advice for anyone contemplating a home or auto loan is to keep the credit lines that you have until after you have finalized the loan itself. Then it is safe to cancel the card.

If you are not planning a major loan activity and the balances on your old cards is zero, go ahead and close them out. This will not hurt your credit score.

Peter Kenny is a writer for The Thrifty Scot, please visit us at Debt Consolidation and Personal Loans
Visit http://www.thriftyscot.co.uk

We strive to provide only quality articles, so if there is a specific topic related to credit card that you would like us to cover, please contact us at any time.

And again, thank you to those contributing daily to our credit card website.

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