New year, new life, or so many people say on December 31st when the bells ring. For many others, their New Year’s resolution is to have their finances better controlled and organized. One of the most common things we have to pay attention to is the fees for having a credit card (which can also be affecting your pocketbook!) So, if keeping everything more organized and knowing where your money goes is also your goal, let us give you these tips that will surely help you.
Interest charges
You may never have realized it, but there are credit cards that have a small additional cost for their use. These are the highest costs of using a credit card, especially if you carry an outstanding balance from month to month. With average annual rates of over 23%, these charges can drive up your expenses.
- How to avoid them:
Pay the balance in full each month to avoid accruing interest, and you will be able to avoid these additional charges.
International transaction fees
If you make purchases abroad or with international suppliers, you will most likely be charged a 3% fee on the total transaction price. Although it may not seem like much, if you add it up over time it ends up being extra money that you lose every time you make purchases outside your country.
- How to avoid them:
Use cards without fees for international transactions, opt for digital wallets or pay in the local currency (if you buy in these countries for regular trips), so that you can avoid this surcharge.
Annual fees
Some cards charge between $95 and $500 annually, depending on the benefits they offer, although sometimes those benefits are worth it… is it worth the cost?
- How to avoid them:
Switch to a card without an annual fee, there are many and they give competitive rewards without having to pay additional costs
Negotiate with your bank to see if they can eliminate this feeCash advance fees
These advances have costs that include a 3%-6% fee on the money you withdraw from the ATM. In addition to immediate interest, they are often very expensive in the long run.
- How to avoid them:
Use a debit card or personal loan with lower rates.
Create an emergency fund to avoid this need.
Fees for exceeding the credit limit
Although it is less common, some banks still charge fees if you exceed the limit of your credit card in your purchases (it is because they do not want you to buy impulsively…)
- How to avoid them:
Request that they reject transactions that exceed your limit.
Keep an eye on your purchases to stay within the limit.
Practical tools to help you control and reduce expenses
Here is a list of platforms that will also help you optimize your purchases and avoid additional charges
- Mint: a free application with which you can synchronize all your bank accounts to give you an overview of your expenses. You can even add an alert to let you know when you reach your monthly budget.
- YNAB (You Need a Budget): with this application you can assign each dollar to a category and avoid overspending
- Credit Karma: with this application you can add your monthly payment calendar
- Prism: you can add your bills to avoid missing the dates
- Compare platforms to see which bank offers you the best conditions for your cards, for these items NerdWallet
Another platform you can use is Letyshops, so if you tend to buy a lot online, a small percentage of those purchases is returned to your wallet.
Controlling your expenses is the first step to clean up your accounts, so little by little you will see how your money is lost less in unnecessary commission expenses and more in things that are really worth it for you!