by Joseph Kenny | 09/20/09

Anyone who has had a credit card for any length of time is aware that credit cards come with fees. Some fees are present no matter what you do while others pop up when you make a mistake. You need a good grasp of what these fees are and how to avoid them as much as possible to keep your credit cards as tools that you use instead of tools that use you.

An Annual Fee

An annual fee is a fee often charged by credit companies as a sort of payment just for you to be able to maintain your account and use that credit card. You should always be aware of the annual fee before you sign up for any credit card because it could serve as a counterbalance to any deals you might be getting with the card. For example, a rewards card may offer rewards that will not even amount to your annual fee. This makes the reward more of a trick than a true incentive.

Fees To Pay Your Bill

This one sounds like a scam. Why would you have to pay more money just to pay your bill? Some companies do charge you a fee, however, when you pay your bill either online or over the phone.

There is a simple way around this fee if you are already stuck with it. You just have to go back to paying your bill through the mail. Still, your best move would be to investigate if these fees exist with a certain card before you sign up. Then you can move on to a card that lets you pay online or over the phone without having to pay extra.

Late Payment Penalties

When you make a late payment on your credit card, you know you are going to end up paying for it. Most credit cards even have a penalty clause included with their initial offers. Your interest rates could potentially skyrocket if you make a late payment on your credit card account. This rate, which can be double or triple your usual interest rate, may not even be lowered until after six months of on-time payments.

This seems like a steep penalty for one late payment, and it is. This is why it is crucial for you to know the late payment penalties for a credit card before you sign up for it. If there is even a chance that you will ever make a late payment, and there is always a chance, then you should know what will be coming at you if it happens.

The Universal Default Clause

This is another clause that can have you paying more if you make a late payment, but this time there's a twist. The late payment does not have to be on your credit card. That's right. If you make a late payment on any of your accounts then some credit card companies will raise your interest rates. To avoid this, you have to make sure every bill you have is paid on time every month, or you could be facing those sky high interest rates again.

Credit cards can make you pay in a number of ways. The best ways to avoid these fees is to know what will cause you to have to pay them and how to avoid them. When you know what they are and how to avoid them, if they can be avoided, then you can be fully prepared and informed before you choose any one credit card.