You owned your first free sneakers as a welcome gift from your first rewards credit card. You paid only half your restaurant bill due to your credit card discount. You also traveled abroad with a free flight using your credit card airmiles. Indeed, those plastics have a lot of perks. Aside from the convenience and availability of credit, your cards offer lots of benefits. However, once you’ve chosen the wrong card and you failed to use it properly, these plastics can come with a high price. In this article, we will look at curbing the cost of owning a credit card. Here are a few fees you don’t need to pay. 

Annual fee

Credit card issuers charge each cardholder with an annual fee ranging from Php1,000 to Php5,000. The annual fee is the cost of owning the card and the full list of privileges that go with it. Some issuers charge the fee once while others allow you to settle the total amount in monthly installments. 

How to avoid it: 

Below are some of the things you can do to save yourself from paying the credit card’s annual membership fee:

1. Choose a credit card that waives the fee for life

Oh yes, you can apply for a free credit card. With the competition among issuers getting tighter each day, a lot of credit cards are offered for free. All you need to do is check out some promos and spend conditions. Some issuers would have you pay a certain amount while others would automatically have the fee waived upon activation. 



2. Request for a reversal

You can call the bank and ask for a reversal of the billed annual fee. The request will be approved based on your usage history, spending, payment, and credit card activity. Make sure the card has been used regularly for the last six months to justify the reversal. 

3. Comply with reversal conditions

The issuers would not automatically waive the fee sometimes, especially if you did not pay for anything on the first year of credit card use. If you called the bank for an annual fee waiver, you would be asked to comply with any of their given conditions. You may either need to spend at least Php10,000 in 60 days or enroll a biller into your credit card account. Some issuers would also want you to apply for a supplementary credit card to get your primary card for free

credit card

Finance charges

Interest charges are based on your credit card’s annual percentage rate or the interest rate stated in a year. It embodies merely the price you have to pay when you leave balances unsettled on due dates. In the Philippines, you can quickly gauge the APR by knowing the monthly interest rate imposed on unpaid balances. Most local credit cards charge a monthly rate of at least 2.75%. 

How to avoid it: 

Finance charges are not automatically imposed upon credit card use. To prevent them, you should make sure that you paid balances in full each month. An unpaid balance carried over to the next billing statement could rack up and bury you in debt. If you can’t pay the balance in full, make sure you pay more than the minimum payment required. Some credit card companies also allow for multiple payments. Take advantage of this privilege by paying off the full balance through small payments within the billing cycle. 

Late payment fees

A late payment fee is imposed on your account if you fail to make the minimum payment requirement on the due date. Some issuers don’t charge anything even when you go beyond your due date. However, most issuers would penalize you for doing so. 

How to avoid it:  

Be mindful of your billing due dates and make sure you settle all dues on time. If you keep on paying late, you will incur fees, plus the delay can take a toll on your credit score. Your credit card issuer can also have the right to charge the cost for each billing cycle that the balance is past due. 

Paying on time can do your finances right. It could relieve you of stress and could save you from paying more than what you used. 

Balance transfer fees

Balance transfers are credit card features that allow you to move your debts from other credit cards into a new one. This will help you quickly manage your debts at an interest rate much lower than the existing one. Balance transfers are considered a privilege granted to new cardholders to entice them to move from one issuer to another. Most cardholders who are provided with balance transfers for free opt to close their other accounts and maintain the one that consolidated their debts. 

How to avoid it:

It is almost always impossible to avoid the balance transfer fees, but if you’re keen enough to search for promos or to inquire from banks, you’ll definitely land on some good deals. Banks can offer 0% interest for the first six months with no transfer fees. Again, it would help if you were patient in searching for offers. 



Final thoughts:

There are still a lot of fees that come with your credit card use. Aside from the ones mentioned above, you might also be unknowingly paying for over-the-limit-fees and cash advance fees. All these and more can be avoided only if you use your credit cards responsibly. Missing the terms and conditions can lead to the high cost of credit card use. At a glance, you save more when you choose the right credit card, know and understand its features, and pay your dues on time. 


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Ailene Amaro

Ailene Amaro

Ailene is a history major turned language teacher turned finance writer. Stern and strict as she may seem, she spends her time away from her lesson plan with music and lyrics.