How to Find Low Fee Credit Cards

Studies show that the majority of American credit card holders do not pay close attention to their credit card statements and are paying billions of dollars in fees each year cumulatively because of it.

Knowing which fees apply to certain circumstances and how to avoid them is a great way to avoid debt and save money, however there are some credit card terms and conditions that are not clear enough for the average consumer to understand. The best way to avoid “hidden” fees is to find a credit card with minimal fees, also known as a low fee credit card.

Types of Fees

In order to find the right low fee credit card it is first important to learn about the various types of fees that could appear on new credit card statement. These fees include annual fees, setup fees, cash advance fees, international purchase fees, phone service fees, and late penalties (which account for the most money spent in credit card fees each year). To the cardholder these fees are annoyances, but to the credit card company, they represent hundreds of millions of dollars in annual profit.

Choosing a Low Fee Card

After learning about the various fees that are associated with credit cards it is time to begin looking for a card that carries a minimal amount of these fees. Start by looking for  a card that has no annual fee, as this is good indicator that other fees may be waived as well. It is also best to find a card that does not charge fees for international purchases, paying bills over the phone, or setup fees. Avoiding these trivial fees could mean hundreds of dollars each year in savings.

Avoiding All Fees

Although it is nearly impossible to find a credit card with zero fees, it is possible to minimize fees by avoiding them altogether. Almost all credit cards charge cash advance fees, so it is wise to avoid cash advances at all times. In fact, some cards may charge interest rates in excess of 25% for cash advances! That means a quarter of the cash advance is being wasted on interest immediately! Purchasing a money order or lottery ticket with a credit card can also incur a fee, even though most people are not aware of this. Purchasing items in a foreign country will usually incur a fee as well, so it is best to use cash when traveling if possible.

The above information outlines some of the basic fees that are well known in the credit card industry. However, there are new fees being created each year, and most of these fees are not specified clearly in the terms and conditions of the card. It is important to enquire about all possible fees before using any credit card for the first time.