How to Avoid Credit Card Penalty Charges

Posted on January 25th, 2009

If you are having problems paying off your debt, you may also have a problem with penalty charges. This is a telling sign that you may have a serious money management problem that needs to be worked on. Although some penalties are against the law and worth fighting, it is also a good idea to look at your repayment practices to find out which issues need to be worked on the most. There are three easy steps to avoid being charged these penalties in the first place, and by following these steps it could eliminate you having to spend more money than necessary.

Step 1.) Keep track of your minimum payment amount:
Every credit card will issue a minimum payment amount. This amount is formulated based on your percentage of overall balance on your card. Every statement check your minimum payment and be sure to pay that amount.

Step 2.) Use an automated payment system:
By setting up an automated payment system, this will eliminate the change that you will get charged a late fee by your credit card company. Automated payment systems are convenient because they take your payment from your bank account every month on a set day, making sure that your payment is not late, and that the correct amount is paid. Keep in mind that if you only make the minimum payment every month, it will still take quite a while to pay off your balance. If possible, still send out a payment in the mail, paying a little extra whenever you are able.

Step3.) Don’t go over your Credit Limit
Another way that the credit companies charge you is by giving a fee for going over your specified credit limit. To avoid this, simply keep track of how much you’ve spent, and be careful to avoid overspending. By simply being conscious of your limit and how much you’ve spend, you could eliminate all over-limit fees that the company would otherwise charge you.

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