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How To Avoid Credit Card Fees In Canada?

Credit cards can provide you with lots of purchasing convenience when you are short on cash.

However, you have to be careful because credit cards can be rife with fees. In fact, the average credit card can have as many as 10 fees that can eat up your income. Here are the 10 most common fees in credit cards and how to avoid them.

Type of credit card fees in Canada

1). Late fees

A late fee is a fee that you will have to pay if you dont make the minimum payment on the due date. With late fees, you could end up paying up to $35. Therefore, you will want to do your best not to have to pay this fee.

So how do you avoid late fees? First, you will want to know when the minimum payment is due on your credit card. Also, make your payment at least 5 business days before the payment is due to ensure it is processed in time. You can set up automatic payments from your financial institution to ensure that you dont miss a payment.

2). ATM fees

If you use your credit card to get cash at an ATM, you can end up incurring fees. Now, this fee does not come from the credit card company itself. This fee comes from the ATM.

So how do you avoid these ATM fees? Chances are, some ATM networks have relationships with your credit card company and offer fee-free transactions. Make sure that you use the ATMs that are in your credit card network. If your credit card does not have any fee-free ATMs, then try your best not to use your credit card for cash advances.

3). Foreign transaction fees

If you use your credit card in a foreign country with a different currency from your home country, you may be charged a foreign transaction fee. These fees can be as much as 3% of the total transaction cost.

The best way to avoid a foreign transaction fee is to get a credit card that does not charge FX-fees.

Here are three popular credit cards that currently have no foreign transaction fees. These cards are great options if you like to travel internationally often:

4). Annual fees

Some credit cards will charge you an annual fee. This fee can range anywhere from about $ 30 to several hundred dollars per year. While some cards will waive the annual fee for the first year, some credit cards offer no annual fee whatsoever.

Here’s a look at some of the top credit cards with no annual fee:

5). Finance charge

A finance charge is a charge that you get for carrying a balance on your card over an extended period of your time. There is where credit cards make their money.

If you want to avoid finance charges, you will want to pay off your credit card each month. However, if you intend to hold a balance on your card, then look for a card that has a low APR rate.

6). Balance transfer fee

A balance transfer fee is a fee that you pay when you transfer the balance from one card to another. Usually, the balance transfer rate is either $5 or 3% of the total money transferred, whichever is greater.

You can avoid these fees by using a card that offers you a no balance transfer fee and an introductory 0% APR. These cards are great if you want to pay down your debt without having to deal with balance transfer fees and high-interest rates:

7). Over-limit fee

An over-limit fee is a fee that you will have to pay if you spend more on your credit card than your current limit. To spend more than your limit allows, you will have to opt-in to allow for this ability.

If you do not opt-in for over-limit spending, your credit card will decline if you attempt to spend over the limit. A credit card company can only bill twice a billing cycle for an over-limit fee by Canadian law.

If you want to avoid an over-limit fee, then simply do not opt-in to have the ability to spend more than your current credit card limit.

8). Cash advance fee

A cash advance fee is a fee charged when you use an ATM to get cash from your credit card. Usually, a cash advance fee will be a percentage of the transaction amount or $10, whichever is greater.

To avoid cash advance fees, use your credit card to make a purchase instead of paying with cash.

9). Returned payment fee

If you attempt to pay your credit card balance and there are not enough funds in your bank account, the credit card company can charge you a returned payment fee. This fee can be as high as $30.

To avoid this fee, be sure that you have enough money in your bank account to cover the payment.

10). Expedited payment fee

An expedited payment fee is a fee that a credit card company charges for processing your payment quickly. Usually, you will request an expedited payment when you make your payment about one or two days before the minimum payment is due. Expedited payment is usually a little lower than a late payment fee.

If you want to avoid an expedited payment, then be sure to make your credit card payment at least five business days before the payment is due.

Keeping yourself away from credit card fees

Credit card companies make their money by charging lots of fees. However, you don’t have to end up paying for most of these fees:

  • Be sure to use the right credit card for your needs
  • Make your payments on time
  • Avoid cash advances.

A few good decisions regarding credit cards can save you lots of money down the road.

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