With the implementation of the Credit Card Act last month, many credit card companies are taking actions to make up for lost profits. The implementation of annual fees and inactivity fees are just two of the most commonly used strategies being utilized by credit card companies to fill in the gap of lost profits. But what can credit card customers do to avoid these extra fees by credit card companies?
Let’s take a look at a few tips:
- Keep your eyes open for changes. One of the most important things a credit card customer can do to avoid excessive credit card fees that may be coming soon is to pay close attention to their monthly credit card statements. Be on the look-out for new fees and any announcements of upcoming fees so that you won’t find yourself caught by surprise.
- Keep your credit record and score in good shape. The credit markets are still tight and many credit card lenders have tightened their standards. What this means is that if you credit score is not high enough, you may be able to get a credit card but only one with outrageous annual fees and other excessive fees. Credit card consumers with high credit will have more options for avoiding credit card fees.
- If you notice new fee announcements on your credit card, you will have the option to “opt-out.” What this means is that you can choose not to pay the fee but you will then need to close your account. For most credit card customers, closing their account is not an option; therefore negotiating with your lender may be the best route. Some credit card lenders may be willing to waive the new fee if they value your business and fear they will lose you to a competitor. However, be prepared to move on to another credit card company if your lender does not want to waive the new fee.
- Consider switching to a credit card issued by a credit union. Only 11% of cards issued by the largest credit unions charge an annual fee, vs. 16% of cards from major banks, according to a survey done last July. Credit cards issued by credit unions also typically have lower late payment fees.