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The 5 scariest credit card fees — and how to avoid them

By WTOP Staff

With Halloween right around the corner, you’re probably preoccupied with costumes, candy and creepy movies. After all, everyone’s favorite fall holiday only comes once a year.

But while you’re busy planning the perfect costume party or getting your kids ready for trick-or-treating, something truly terrifying could be lurking in your wallet. Take a look at the tips below on avoiding the five scariest credit card fees — no garlic or sage required!

1. Late fees

You’ll get hit with a late fee if you’re (you guessed it) late in making a payment on your credit card bill. Most issuers charge a $25 to $35 fee per late payment, and while this doesn’t sound like much, it can really add up over time if you routinely pay late. And this bad habit could cost you more than a few extra bucks. Since payment history makes up 35 percent of your credit score, failing to make prompt payments could result in a serious ding.

Luckily, avoiding late fees and possible damage to your credit score is as simple as paying your bill on time. If you have a hard time remembering to do so, consider setting up calendar alerts for your billing due dates. You can also arrange for your issuer to automatically pay your bill on your behalf every month — just be sure that you keep enough in your checking account to cover it.

2. Annual fees

Some credit cards charge a yearly fee to keep your account open. Typically, this fee ranges from $50 to $150, but it can be much higher if you have a premium card.

These days, it’s pretty easy to avoid paying an annual fee. There are a lot of great credit cards on the market that don’t charge one, so simply doing a little research will help you uncover the no-annual-fee card that’s right for your lifestyle.

However, keep in mind cards that charge an annual fee usually have high rewards rates, big sign- up bonuses and a bevy of fringe benefits. All this means that, in some cases, paying an annual fee might be worth it. For instance, let’s say you’re using a co-branded airline credit card that charges a $100 annual fee. But one of its perks is that you get a free checked bag with every flight. Since checked bags usually cost $25 a pop, in two round- trip flights, that annual fee has paid for itself.

Again, you can easily avoid annual fees if you want to. But don’t automatically dismiss cards that charge this fee before you’ve considered all the facts.

3. Balance transfer fees

If you’re planning to refinance high-interest credit card debt with a 0 percent balance transfer, you’re probably excited about all the money you’ll save on finance charges. It’s true that a long interest-free period will give you the opportunity to make real progress on paying off your debt, but a lot of people forget to factor the cost of balance transfer fees into their calculations.

This fee usually amounts to 3 percent of the balance you’re transferring onto the 0 percent card. That doesn’t sound too bad, but 3 percent could be a sizable sum if you’re dealing with a lot of debt.

Paying this fee isn’t inevitable, though; you can dodge it if your credit is good enough to qualify for the right card. Otherwise, you’ll just have to do the math to figure out if forking over the fee is worthwhile compared with what you’ll save on interest payments.

4. Cash advance fees

If you need quick access to cash, you might think about using your credit card to take a cash advance from an ATM. While this is certainly a convenient option, it doesn’t come cheap. Cash advance fees usually run 2 percent to 5 percent of the amount withdrawn, plus you’ll have ATM fees and interest charges on the borrowed money. And remember, the interest assessed on a cash advance is usually higher than your purchase APR.

Because of all these expenses, it’s generally wise to avoid taking cash advances altogether. Unless you’re dealing with a serious emergency, find other ways to come up with cash. For instance, taking out a personal loan or borrowing money from a friend both require a little more legwork, but the savings are worth it.

5. Foreign transaction fees

If you’ve ever traveled abroad with your credit card, you might have noticed a slew of fees at the bottom of your statement when you returned home. This is because many credit cards charge a foreign transaction fee of 3 percent of every purchase made overseas. Again, this sounds inconsequential, but if you travel abroad frequently, you could be out hundreds of dollars in fees by year’s end.

The key to avoiding this fate is picking the right card. Many issuers offer cards that charge no foreign transaction fee. Plus, these cards often come EMV chip-enabled, so you’ll have much better acceptance overseas.

There’s no need to be frightened of credit card fees if you know how to avoid them. Keep the tips above in mind for cheaper swiping all year round!

More from U.S. News

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The 5 Scariest Credit Card Fees — And How to Avoid Them originally appeared on usnews.com

Don’t Settle for Student Loans to Pay for Online Education

By WTOP Staff
Online college programs are becoming a more popular choice for prospective students, with one study finding that more than 6 million students enrolled in at least one online course in fall 2015. The popularity of these courses can be attributed in part to their flexibility with working adults' schedules, students' ability to progress more quickly through online programs and, oftentimes, cheaper tuition. [See 10 low-cost online bachelor's programs for out-of-state students.]Online degrees can be beneficial to many college students, but some studies have shown online learners complete their programs at lower rates than students at traditional brick-and-mortar campuses. Individuals with student loans but no degree comprise two-thirds of defaulted borrowers. Though these numbers are not encouraging, just like for traditional programs, there are ways to reduce how much you'll need to borrow for an online program to ensure you won't become one of these statistics. Don't just settle on borrowing student loans to cover the whole cost of your program and living expenses. Instead, start thinking about how to cut costs and cover your balance in different ways, such as the following. -- Grants and scholarships: Even though you are taking an online course, you can still apply and receive grants and scholarships. But your first step should be to complete the Free Application for Federal Student Aid, commonly referred to as the FAFSA, which will allow you to receive a Pell Grant if your expected family contribution is low enough. The EFC criteria and award amounts are adjusted annually, but the 2017-2018 academic year awards range from $606 to $5,920, which could significantly lower the amount you borrow annually. Your next step is to apply for scholarships. You can start by checking online scholarship search engines, such as the Salt Scholarship Search, College Board's BigFuture and Peterson's. But don't forget to take advantage of local organizations and your school's financial aid office. Both may offer scholarships that you can't find with a national scholarship search. [Review these 10 sites to kick off your scholarship search.]For instance, organizations like the Elks Club, Knights of Columbus or the Rotary Club typically offer scholarships annually to local students. Just because you're going to school online doesn't mean you're ineligible. Visit your local library for scholarship listings, and ask around town. You might be surprised how many local organizations offer scholarships. While these scholarships typically aren't large, every little bit counts. Each dollar you receive in a scholarship is a dollar you don't have to borrow and pay interest on. -- Work-study: Another option for online students may be work-study awards. Not all students enrolled in online programs are eligible, but students at some schools -- including, for example, SUNY Empire State College and Liberty University -- are. Work-study awards are not given upfront like scholarships and grants. In most cases, they are an offer to earn up to the awarded amount if you secure an eligible work-study job. While there is a misconception that all work-study jobs must be on campus, students can work for off-campus, nonprofit or public employers as long as the work is in the public's interest. You may be able to work for a for-profit employer if the job is relevant to your course of study. No matter who the outside employer is, it will need to have an established agreement with your college for you to receive work-study funds. Remember, to be eligible for federal financial aid, you must be enrolled and pursuing a degree or certificate. If you're not working toward a credential, Pell Grants and work-study won't be option, but you may still be able to take advantage of private scholarships -- just be sure to read the eligibility criteria carefully. [Explore what to know about financial aid in online programs.]-- Pay as you go: One of the great benefits to enrolling online is the flexible schedule, which can allow you to complete your college coursework around your responsibilities. But prospective students often overlook using their part- or full-time job earnings as an option for paying for college. Almost 80 percent of college students in 2015 worked at least part time while attending classes, according to the National Center for Education Statistics. By budgeting and thinking strategically about your college costs, you can likely reduce your dependence on student loans by paying a portion out of pocket. Many -- but not all -- online programs are less expensive than traditional programs and often have shorter payment periods. Six, eight or 10 weeks are common course durations. Because of the frequency of payments in an online setting, you may be well-placed to pay as you go and possibly avoid borrowing altogether. Attending college online and avoiding student loans may be challenging, but if you are willing to put in the effort, you can limit the amount you need to borrow. More from U.S. News Q&A: Understanding Student Loan Discharge Eligibility Student Loan Refinancing Isn't Right for All Borrowers
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