SPEND RESPONSIBLY - Reduce your bank fees

Cutting the cost of credit cards

Credit cards can involve a number of fees – some of which relate to the provision of the card (for example annual card fees) and some of which relate to the way you manage it (exception fees). Having a clear idea of what you want from your credit card can help you reduce card fees. Staying on top of your card spending will help reduce the risk of incurring an exception fee.

How to reduce card fees

Shopping around for a good deal will help you get value for your credit card.

Not all credit cards charge annual fees though as a general rule, the cheaper the card, the fewer features the card will offer. Paying an annual card fee can entitle the cardholder to extras like free or discounted travel insurance. However always read the fine print to discover whether or not you will benefit from paying annual card fees.

Ways to avoid exception fees

With sensible management of your credit card spending and repayments, it is possible to avoid exception fees altogether.

Always read the terms and conditions of your credit card to understand what sort of fees you may be charged.

Over the limit fees

Exceeding your specified credit limit may result in a fee being charged. Do note, your card may be accepted by merchants even when you have exceeded your limit, so it is up to you, the cardholder, to be aware of your outstanding credit balance.

You should receive a monthly credit card statement in the mail –always review this to ensure the transactions that appear on it have been authorised by you. While this statement will give you an idea of how much you owe on your credit card, a more up to date balance should be available over the internet. Check this regularly, or whenever you are unsure about your level of available credit.

Late payment fees

Your regular credit card statements will specify the repayment required on your card each month, and when the payment is due.

Failing to meet this repayment by the due date may result in a ‘late payment’ fee.

The best way to avoid this fee is simply by reviewing your statements, noting the due date and ensuring you have made the repayment by this date.

If you are making repayments over the internet, be sure you meet your bank’s cut-off time for transaction processing. It typically takes one business day for a payment to be transferred from your bank account to your credit card.