Here are 4 Fees that you actually Should Pay

The average consumer is loath to pay any extra fees whatsoever for their banking, their credit card or, for that matter, anything else. We can’t say that we blame them because we hate paying extra fees for anything as well and do our best to make sure that we never have to pay anything more than the actual, specific costs for, well, anything.

That being said, there are a handful of fees that it actually pays you to pay (no pun intended) and our little blog today will let you know what they are and why you should do it. Enjoy.

  • Annual Credit Card Fees. While most financial professionals will tell you to avoid credit cards with annual fees, they can actually help you save money if you have the right type of card, even on cards that charge quite a bit of money for their annual fee. For example, cards with smaller annual fees will sometimes help you cover the charge if you pay late as well as providing extended coverage on items that you purchase with that card.

Credit cards with annual fees that are  higher also come with benefits like credits for airline fees and also insurance protection when you travel. What you want to look for is a card that has benefits that save you enough money to actually pay for the fee, which of course then makes the fee worth paying. These include cards that give you a lower interest rates, extend your warranty on purchases and cover protection if you have some type of loss on a product or service that you’ve purchased. One caveat is that most of these services and incentives only become valuable if you are a consumer that uses your credit card regularly and often. If not, the annual fee might not be worth the cost.

  • Monthly Overdraft Fees from your Bank. People hate paying extra money to their bank for any type of service but paying a monthly overdraft fee might actually be quite beneficial. If you think there’s a chance that you’ll spend more money than you actually have in your bank account, having overdraft protection could save you quite a bit of money.

The reason is simply this; the typical overdraft fee is about $30 for every transaction that you make after your bank account has been depleted. While you can certainly still use your debit card to make purchases, every time you do you will be paying this overdraft fee, meaning that you could buy a gallon of milk for $4. but actually end up paying $34 for that moo juice. Without overdraft protection you could seriously dig yourself a financial hole if you go out and make a number of purchases after you’ve maxed out your bank account and, if this is something that you’re prone to doing, paying a monthly overdraft fee might be the best protection you can buy. On the other hand, if you keep meticulous track of exactly what you have in your bank account at all time, this see might not be necessary for you.

  • Balance Transfer Fees from your Credit Card. While finding a credit card with a 0% balance transfer offer isn’t particularly difficult, the trick is to have credit that’s good enough to qualify for it. If you do, you can transfer high balances from one card to a new one that has a lower interest rate and save yourself a good bit of money.

On the other hand, if you don’t have credit that’s good enough to qualify for a 0% balance transfer offer on a new card, the balance transfer fee that you’ll have to pay (normally from 3% to 5%) might be well worth the cost if it means that you can transfer your balance from a credit card with very high interest to one with much lower interest. For example, if the balance transfer fee is $300 but, over the course of a year, the new interest rate on your new card saves you $500, that’s a net savings of $200 and well worth paying the fee. If you find a card that will give you the added bonus of not charging you for interest for the first year to 18 months, that’s an extra bonus!

As you can see, these extra fees can (in some cases) actually save you more money than they cost. You’ll have to do a bit of research and make sure that you know exactly what you’re paying and, conversely, what that payment will enable you to save, but if you do it correctly you should end up on top. If you have any questions about personal finance matters of any kind, please let us know and we’ll get back to you ASAP with advice and answers.

 





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