There are all kinds of hidden charges built into credit cards. These days, it seems like you have to be a math whiz to figure out the actual credit card costs. This is on top of other bank fees whereby people rightfully disagree to pay for accessing their own money.
The Competition Bureau has announced that credit card costs in Canada are some of the highest in the world. If you are a merchant, you will be charged hefty transaction fees. Canadian merchants pay between 1.5 and 3 percent of the sale in credit card transaction costs. This amount is almost double what merchants in Australia, New Zealand, and Europe pay. In comparison, merchants pay only 12 cents for Canadian Interac debit transactions. To make it a point, if a customer buys an item worth $400 and charges it to a credit card, that will cost to the merchant as much as $12. If the customer buys the same item with a debit car, the merchant will pay just twelve cents.
Customers face hefty fees as well. And the sad truth is that the credit card company can change its policy no matter what, and you have no say whatsoever in the matter. When you become a client, you sign a contract with them and in this contract, it is written that the bank reserves the right to make any changes necessary to the policy and the agreement. You have signed this, so this is what you shall reap.
Let’s talk a little about hidden fees. Annual fees are quite easy to see, most of the time. Paradoxically, the cards to watch out for are the ones that do not carry annual fees at all. These cards come with the requirement that you make a specific number of purchases every year, and you get charged if you do not use the card as much as you are expected to. You should get such a card only if you plan on using it often. Clearly, such cards are not to be used for emergencies only.
Sometimes credit card companies and banks charge you if you pay your card over the phone and other phone services. If this is the case with you, and you like to check your balance or pay the card over the phone regularly, you should take precautions. It is the same with online payments or balance checks. They are not always free either. Make sure you check for hidden charges.
Late payments always carry a fee; so, make efforts to avoid them. Not only is there a fee, but the interest rate is much higher as well. If you are bombarded with an offer such as “no fee on late payments”, do not be too quick to jump for joy. Your glee is most likely premature. They will hit you with sky-high interest before you can say your name, which will more than make up for the lack of a late charge.
Comments on this entry are closed.