- 1). Check the APR (annual percentage rate) for the credit card. The APR indicates the percentage amount that you will have to pay in interest fees each year. For example, if your APR is 12%, you can divide that 12% by 12 months. This is equal to paying 1 percent of your bill balance in interest each month. If the APR is 15%, you will pay 1.25% of your bill balance in interest each month. The interest fees you pay do not go toward your bill balance. Therefore, you want to choose a credit card that has a low to 0% APR.
- 2). Determine whether or not the credit card charges an "Annual Fee." An annual fee is a charge that is assessed once per year just for having the card.
- 3). Look at the "Late Payment Fee." The late payment fee indicates how much you will be charged if your bill is not paid by the monthly due date. The fee for a late payment is around $25.00 (this can vary depending upon how much of the payment was late). These late payment fees can not only drive up your credit card balance, but also give your creditor the right to raise your interest rate. In a nutshell, pay your bill on time to avoid the late payment fee.
- 4). Look at the "Low Balance Fee." Some credit card companies will charge you a small fee each month if you carry a zero balance on your credit card. The point of this fee is to get you to use your credit card. So if you are going to be charged a fee for having a low balance, you may as well purchase a small item that is worth the amount of the fee. By doing so, you can at least say you got something for your money. Otherwise you are just giving free money away to the credit card company.
- 5). Verify the "Cash Advance" fees. The cash advance fees will inform you of the charges you will incur if you use the credit card to withdraw cash from the ATM (automated teller machine). These fees tend to be high to reduce the amount of cash withdrawals you make.
- 6). Check the fees that are charged for raising your credit limit. Some credit card companies will charge up to 50% of your balance to raise your credit limit.
- 7). Look at the "Over The Limit" fees. This is a fee that is charged each time you make a purchase that puts you over the credit limit that has been awarded to you. Even if you go over your limit by a few cents you will still be charged for going over the limit. Therefore, stay under your limit.
- 8). Determine whether or not your credit card issues "Foreign Transaction Fees." A foreign transaction fee is a hefty fee that is charged for converting foreign currency. You can receive this fee just for using your credit card to make a purchase while you are in another country.
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