1 Answers
SunLight
Updated:10/09/2024
Many consumers are attracted to credit card offers with 0% interest and no balance transfer fees. However, hidden fees can still apply.
Q: What are potential hidden fees associated with these offers?
- Annual Fees: Some credit cards charge a yearly fee, even if they advertise no balance transfer fees.
- Late Payment Fees: Missing a payment can trigger unexpected charges, often adding up to $40.
- Foreign Transaction Fees: Some cards impose fees on purchases made outside the country, despite promotional offers.
- Cash Advance Fees: Cash advances might incur high fees, often coupled with high-interest rates.
- Balance Calculation Fees: Some cards may use methods to calculate interest on your balance that can result in higher fees.
Q: Are there any introductory periods for offers?
Most offers for 0% interest come with an introductory period, typically ranging from 6 to 18 months. It is essential to understand when this period ends and what the interest rate will revert to afterward.
Q: How can I find out if there are hidden fees?
Review the terms and conditions carefully. Pay attention to any clauses regarding fees, late payments, and the rates after promotional periods.
Statistics Table of Common Hidden Fees in Credit Cards
| Fee Type | Average Cost | Occurrence |
|---|---|---|
| Annual Fee | $0 – $550 | 20% of cards |
| Late Payment Fee | $30 – $40 | 12% of cards |
| Foreign Transaction Fee | 1% – 3% | 40% of cards |
| Cash Advance Fee | $10 or 5% of amount | 50% of cards |
Mind Map of Considerations When Choosing a Credit Card
- Understand Promotional Offers
- 0% Introductory Interest
- No Balance Transfer Fees
- Identify Hidden Fees
- Annual Fees
- Late Payment Fees
- Cash Advance Fees
- Foreign Transaction Fees
- Pay Attention to Terms
- Introductory Period Duration
- Post-Promotional Rates
- Review Credit Card Scoring
- How Card Usage Affects Credit Score
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