Fee Free Credit Card Deals - Reality or Myth?

It is obvious that credit card companies are not charitable organizations. They are on the market in order to get revenues. Some credit card companies make profit on the so-called "hidden fees". Although, by federal laws fees cannot be hidden from customers. This, however, does not mean that credit cardholders understand how banks charge them.

Very often all these tricky fees are written in fine print at the bottom of the card agreement. Or they are included into an account disclosure statement that you receive only after you have opened an account. That is why these fees are called hidden.

First of all you need to remember that there are no fee free cards. Secondly, consider the fact, that Americans pay $31 billion in credit card fees annually. If you do not know how to protect yourself from credit card companies' tricks, you will end up paying huge fees. What are they?

1. First of all take a closer look at due dates when your payment must be made. Very often banks complicate things so that you have to make your monthly payment not only, let us say, on the 16th, but also on the 16th before 2 p.m. So, if your check is lost in mail or arrives 30 minutes later, you will be charged a late payment fee.

2. If you were close to your credit limit and your monthly payment arrived late, late payment fee can add up to the whole amount of debt and as a result you card will be overmaxed. Therefore, another fee will be added - over-limit fee. And your interest rate will increase as well.

3. What happens next? If you have more than one card, be prepared that your other cards' interest rates will rise. This is a universal default clause. It is used by banks to increase your interest rate, even if you have never been late with your payments to that particular bank.

4. Now you have a credit card with a balance on which you pay high interest rate. And naturally you decide to make a balance transfer credit card deal with more favorable terms. You start to shop for another credit card and find one with zero interest for balance transfers. You need to know that 0% interest rate is not everything you should consider. There is also a balance transfer fee that varies from bank to bank.

5. If you go abroad and use your credit card, be prepared for a hefty foreign-currency fee which is usually around 3% of your purchase. So, you should better stick to traveler's checks or cash.

Wonder what do banks do with all the fees? They explain that these fees are aimed to cover their expenses. It is curious why they need all these "hidden" fees if only interest rates bring them approximately $80 billion annually! But as you know money is never enough.

Well, being very attentive when making a credit card deal can save you lots of money, nerves and time. No matter how attractive a credit may seem at the first glance, study the fine print.