Credit Cards

Why You Need to Watch out for Credit Card Charges

If you have a credit card you will be aware of the fact that they charge interest on the card. You will know that when you use the card, the debits will add up and at a certain time each month you will be sent a bill. If you pay it off in full, you will pay no extra and if you pay less than the full amount you will pay interest on the outstanding balance. However, there may be other charges that you are paying on your card, that you might not be aware of and so unless you want to be paying money out unnecessarily you need to look for these.

One charge that catches a lot of people out is on cash withdrawals. With many credit cards, if you make a cash withdrawal you will be charged for it. You may even find that you will start paying interest on the amount immediately. Some cash machines will warn people that there is a charge for the withdrawal so take notice. It is sometimes easy to put in your credit card instead of your debit card when making a withdrawal and accidently take money from your credit card rather than your bank account so be very careful with what you are doing.

Using credit cards abroad can be safe and convenient but also expensive. If this is something that you plan on doing, then look hard into it first. It may be better to apply for a different credit card that might be cheaper, just for using abroad. You may find that you would be better off using a pre-paid card, that you credit before you go and use like a credit card. However, you will need to check to make sure that this is accepted at the place that you travel to. There are some great places online to research the best ways to carry money abroad so do some research before you go.

Certain shops or companies will also charge you for using a credit card. They may have a charge if you spend below a certain amount of money or they may add on some sort of fee or percentage to it. Check carefully before you pay to make sure that this is not the case. You could even ask if you think there is a chance that they may do this. It tends to be small independent retailers or car dealers or when paying utility bills online. These charges can be quite high and so it is wise to avoid them if you can, by paying in case or by debit card.

Another charge to look out for is a gratuity charge. In some restaurants this will be automatically added into the payment machine, even though it is optional. You may prefer to leave a cash tip or did not feel that the service you received deserved a tip and so you should make sure that this has not been added on unless you want to pay for it this way. If you are not sure whether it has been added on, then ask before you pay so that you are completely sure exactly what you are paying for.

It is worth becoming familiar with the terms of your credit card and when they may charge you extra. As well as cash withdrawals and using it abroad there may be other circumstances when they charge you extra. This will vary between card providers and so if you change your card or are sent a change to the terms and conditions, look at them carefully so that you can find out whether there is anything you need to be aware of. This will allow you to be more careful when using your card and be less likely to be charged unnecessarily.

Another thing to check for is insurance. Some cards are set up automatically with insurance to cover missed payments. This may be something that you think you would like, but you may not be too keen on the idea. Take a look at the insurance and what it covers you for and then you will be able to decide whether you think that it is the right thing for you. You may think that the risk is too low for you to bother with it or that you would be better off using the money for other things.

So there are many ways that you might find yourself paying out more money on your credit card than you intended. Make sure that you are careful so that you do not pay extra by mistake and be aware of where they are likely to charge you so that you will not do something by mistake that will lead to a charge that you did not want to pay.