Are Credit Card Annual Fees Reason to Walk?
Right now, only about 20% of credit cards carry an annual fee, so it’s easy for consumers to avoid paying them, says Bill Hardekopf, the chief executive of LowCards.com, a credit-card comparison web site. But the combined pressures of the recession and new credit-card regulations that tamped down on other fees could cause more card issuers to begin charging an annual toll.
Ferreting Out Those Hidden Fees
Just a couple of years ago, consumers paid a fee of 3% of a cash advance, or a minimum of $5. Now that fee is commonly 4% or 5%, and the minimum is often $10, according to LowCards.com. In addition, annual interest rates for cash advances have climbed in the past year to roughly 25% from the low 20% range.
High Rates, More Fees–Credit Traps are Here to Stay
A spokeswoman confirmed that Bank of America began charging an annual fee ranging from $29 to $99 for a “very limited” group of cardholders in February, while information gathered by LowCards.com shows that other issuers have recently hiked transfer balance fees, cash advance fees and foreign transaction fees in addition to annual fees.
Credit Cards and College Kids: It Doesn’t Have to be a Dangerous Mix
“If you are struggling to pay for your own food, housing, transportation and education bills, you can’t afford to carry a balance on a credit card,” says Bill Hardekopf, chief executive of LowCards.com and author of The Credit Card Guidebook.
What to do About Your Credit Cards Now
The Fed has rolled out a new credit card comparison site (http://www.federalreserve.gov/creditcardagreements/) which offers a searchable database of current card agreements, allowing consumers to read all the small print before they apply for a card.
But it does not include information on rewards programs — you can usually find good information about that on comparison sites like LowCards.com.
Monthly Credit Card Data Signal Continued Turnaround
“Card issuers have already made pretty significant changes in their portfolio” to minimize the downside, said Bill Hardekopf, chief executive of LowCards.com and an author of The Credit Card Guidebook.
Airline Credit Cards Dangle Perks to Lure New Customers
“Card issuers are raising more money by getting annual fees, and they’re using the rewards as an add-on to justify the fee,” Bill Hardekopf, CEO of credit-card comparison site LowCards.com, tells the Detroit News.
If You Get in a Bind, There are Ways to Avoid the Payday Loan Trap
Most card issuers charge a fee to advance you money, and the interest rates are usually higher than you’ll pay for credit card purchases. In recent months, some issuers have raised cash-advance fees and interest rates, says Bill Hardekopf, CEO of LowCards.com. For example, in February, Citi increased its interest rate for cash advances to 25.24% from 21.99%.
