LIFE EVENTS
QUESTIONS

Credit Card Fees

Q.1. What types of credit card fees are there?
A.

These include annual fees, cash advance fees, currency conversion fees and carrying charges. Be certain to understand the fees associated with the card you choose.

Q.2. What is the problem with carrying a monthly balance?
A.

Failing to pay off the monthly balance can prove costly as you will have to pay interest at a very high rate. Use this calculator to see how much. Make certain that you get the credit card which is best for you. This 3 minute, funny video helps explain a lot.

Q.3. How does interest on credit cards work?
A.

If you do not pay what you owe, in full, you will have to pay interest on every purchase back to the day you bought it. This can result in significant charges and make it hard to catch up. Alan’s story is an example of how this works. If you pay back what you owe, in full, each month, you will not pay interest charges.

Q.4. Should I use a line of credit?
A.

Using a line of credit for purchases is cheaper than using a credit card with a higher interest rate. However, you are still incurring a debt and you will still have that money to pay back with interest, albeit at a lower rate. You should never use a line of credit to incur debts that will be difficult to pay back.