Saving Money: How to Avoid Sneaky Bank Fees

Credit-Card Queen

While it's easy today to get cards with no annual up-front costs, they often have back-end penalty fees. Late fees and over-limit fees average $35 each, more than triple eight years ago. And credit-card companies are increasingly aggressive in imposing them. In the 1980s, cardholders could often pay up to 15 days after their due date without risking a late fee. Now fees are assessed if payment fails to arrive by mid-afternoon on the due date. And whereas many cardholders were once able to go over their credit-line limit by 5 to 20 percent without penalty, today over-limit fees are imposed anytime a balance exceeds a credit line.

Sometimes your credit-card company will decline a transaction if it will exceed your limit; other times a merchant may not be electronically linked to the credit card's network at the time the charge is put through. Yet even if the transaction is blocked, you could be charged a fee for trying to exceed your limit -- or interest charges and other fees for a late payment could push you above your limit.

If you try to transfer the balance from one credit card to another for a lower interest rate, you could also get hit with a heavy fee. When credit was more easily available a few years ago, balance-transfer offers were usually free; now there's a 3 to 5 percent charge on the transferred amount. Today transferring a $5,000 balance with a 4 percent fee could cost you $200.

The Fix: Always be sure to read the fine print of any credit-card offer. Also, sign up for e-mail or text message alerts to notify you when you're close to your credit limit or billing due date. You can also have your credit-card company automatically debit your bank account when your bill is due --but make sure there's enough money in that account or you'll risk the overdraft fee.