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Rewards credit card fees to watch out for

Published on November 24th, 2020
  Written by 
Bill Tsouvalas
Bill Tsouvalas is the managing director and a key company spokesperson at Savvy. As a personal finance expert, he often shares his insights on a range of topics, being featured on leading news outlets including News Corp publications such as the Daily Telegraph and Herald Sun, Fairfax Media publications such as the Australian Financial Review, the Seven Network and more. Bill has over 15 years of experience working in the finance industry and founded Savvy in 2010 with a vision to provide affordable and accessible finance options to all Australians. He has built Savvy from a small asset finance brokerage into a financial comparison website which now attracts close to 2 million Aussies per year and was included in the BRW’s Fast 100 in 2015 as one of the fastest-growing companies in the country. He’s passionate about helping Australians make financially savvy decisions and reviews content across the brand to ensure its accuracy. You can follow Bill on LinkedIn.
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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.

Overdraft fees

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.

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This guide provides general information and does not consider your individual needs, finances or objectives. We do not make any recommendation or suggestion about which product is best for you based on your specific situation and we do not compare all companies in the market, or all products offered by all companies. It’s always important to consider whether professional financial, legal or taxation advice is appropriate for you before choosing or purchasing a financial product.

The content on our website is produced by experts in the field of finance and reviewed as part of our editorial guidelines. We endeavour to keep all information across our site updated with accurate information.

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