Aussie love getting freebies, which is why some credit card holders will opt for a rewards card that helps them get freebies while they shop. However, before you use your rewards credit card there are a few fees that you can watch out for to prepare you on your journey to find a credit card that comes with all the right features. Here is what you need to know.
Credit card fees
Owning a credit card can come with general fees that you need to be aware of. This can help you be more mindful when using your card. Most credit cards come with an annual fee that can range from $100 and $450. Your annual fee will also be affected by the number of features that the card comes with. There are some cards on the market you can get access to that come with no annual fees, but this usually runs for a promotional period.
Reward program fee
Being able to access the array of benefits that come with your reward card can come with a fee that included into your annual fee, but there are also some cards that will require that you pay for the fee separately. The amount you will pay differs according to the type of program you choose. Keep in mind that some frequent flyer programs may charge an extra member fee.
International transaction fee
If you are planning to travel and take your credit card along with you, be mindful of the international transaction fee that is applied to each purchase you make. This also means purchases that are bought from the comfort of your home online. This can be charged at the value of 1%-3% on each purchase you make.
Penalty fees you need to be aware of
Choosing a reward card that matches your budget is vital. Not being able to meet your monthly repayments can have negative consequences. Your lender can charge you a late payment fee. Postponing the payment on your card can have a dire effect such as your lender listing it as a default on your credit report, which can affect future borrowing.
There are drawbacks to being a point chaser such as going over your credit card limit. You may have a target you want to reach in terms of your reward points, but if you find that you are spending more to access these points then you might have a card that isn’t suitable for you. Your provider can slap you with an overdraft fee which can be as much as $35. This can throw your budget off and can possibly result in making your monthly repayments a tight squeeze.
Having a budget set up and using your card for targeted spending can help you avoid fees that can make meeting your card repayments hard. You can always compare your way to a deal that is more financially suitable for you.