Understanding Credit Card Penalties

By Author: Alisdair Cosgrove
Total Articles: 184
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At one time or another the average long term user of a credit card will be charged some of the fees commonly used by credit card companies.Some of the fees on most credit cards are the initial set-up fee, annual fees, and a fee is charged to raise the credit line limit.When the payments are late or the credit is exceeded fees are charged for using the credit card in an irresponsible manner.

If you can get an idea of how the fees commonly used by the credit card companies work and why the fees are appearing on your monthly statement it can be of help to you.

In order to establish a new credit line and help to pay the costs associated with opening the new credit card account a one time set-up fee is assessed.
The annual fee is charged for keeping the credit line accessible to the customer during the year; this fee may be charged once a year, every three months, or maybe it will be charged monthly.The frequency of the assessment of these fees will be determined by the policies of the credit card company or maybe by the terms on the credit card.

To obtain cash quickly the cash advance feature ...
... on your credit card will charge a cash advance fee as a flat rate or as a percentage amount of the cash received in the cash advance transaction.When you use a banking facility or an ATM to obtain your cash advance you will be charged a fee by them also.

The transferring of one credit card's balance to the balance of another has a fee attached to it and the transfers are done according to the individual card's policies.These balance transfers are done as a usual practice to transfer the balance of a high interest rated card to the balance on a low interest card.

The late fee is a type of penalty that the credit card users have to pay when they are late with payments.Before using your credit card you need to find out exactly what the charge is for being late with payments because the late fee amount will be determined by the type of credit card you use and the provider of the credit card.

If a credit line is increased because the customer requests it there is a fee assessed for this credit card service.An over the limit balance fee is charged in the event that the cardholder makes purchases exceeding the preset limits on the credit line of the card.When this fee is assessed it can vary because of the credit card terms or the safeguards which are in place to keep the cardholder from using the card for too many purchases.

When a check is returned from the credit card company because of insufficient funds, a penalty fee is charged to the customer to compensate the credit card company.An additional fee is charged by the bank, so you can be charged two substantial fees for bouncing the same check.
Alisdair Cosgrove has been writing finance articles for many years and can find more of his work at the UK site CreditCardsWeb.co.uk, offering credit card comparisons for UK residents and also a great selection of credit card balance transfers. Visit today to read more of Alisdair's great credit card articles including collecting reward points