Credit cards, bank accounts and loans all have a few things in common — none more obvious than fees. There are so many potential fees that it’s hard to keep track of all of them.
By doing your homework before you borrow money or rack up credit card debt, you can determine the right path for you. Spotloan, for instance, is a short-term installment loan that prides itself on having no hidden fees.
It’s always good to read the fine print and figure out which fees your financial institution may subject you to so you can avoid being hit with fees. And speaking of being hit, here are a few of the common fees you should know about, and the punches they feel like.
Application Fees: A Ticket Punch.
Credit card companies sometimes charge people with bad credit an application fee. Because those people come with more risk, the companies want to take a closer look at whether they want to extend a line of credit to them. And the companies charge the potential customer for it, without any guarantee they’ll actually get the credit card. So, the price of admission is the first of the fees you may face. That’s a ticket punch.
Annual Fees: A Sucker Punch.
One of the most common places you see annual fees are with credit cards. Not all cards have them, but many do. If you’re carrying a balance on your credit card, annual fees can be even more painful. Think of it like this, credit cards often charge interest rates somewhere in the range of 20 percent on your balance. And then, once a year, they make you pay even more? That’s a sucker punch.
Prepayment Fees: A Punch Out.
These common fees may vary from one lender to another, but the result is always the same — you get punished for actually paying back your loan. Yeah, you read that right. Prepayment fees are essentially penalties for paying back your loan sooner than expected. Just as you’re thinking that you went above and beyond to make your payments (and more), you get one last fee on the way out. That’s a punch out.
Cash Advance Fees: A Combination Punch.
One feature of certain credit cards is the ability to take a cash advance. Through a cash advance, you receive a cash payment in exchange for adding the same amount to your credit card balance. But in reality, credit card companies treat cash advances differently — often with a higher interest rate that compounds more quickly. Couple that with a cash advance fee of as much as 5 percent or more on top of the other charges and it can be a bad idea that keeps getting worse. That’s a combination punch.
Note: A short-term installment loan, like a Spotloan, can essentially serve as a cash advance without the fees. The interest structure is transparent and upfront, too.
Late Fees: A Gut Punch.
Unfortunately, we all know what late fees are. These very common penalties are enacted when you miss a payment or make a payment after its designated due date. Maybe you simply forgot, maybe you were waiting on a paycheck that came after the payment was due, or maybe you just blew it for a month. No matter the reason, the fee is the same, and it’s a gut punch.
NSF Fees: A Tag-Team Punch.
NSF stands for “non-sufficient funds,” and these are the fees that come out when your checking account doesn’t have the necessary funds in it to cover the value of the transactions you’re trying to carry out. These fees are especially painful because not only do you have to catch up to the amount that you’re overdrawn, but you also have to cover a substantial NSF fee — commonly in the $35 range. If you have a particularly bad day, you could even rack up multiple NSF fees for multiple transactions. That’s a tag-team punch.
Lesser Fees: Rapid-Fire Punches.
Balance Transfer Fees: These are charged when you move debt from one credit card to another.
Pay-by-Phone Fees: These fees are tacked on by companies looking to take advantage of the convenience of paying by phone. Basically, they’re charging you to take your money.
Overlimit Fees: Again, these fees can differ from one credit card company to another, but they all involve a penalty for having too high a balance on your card. These can be avoided altogether with the help of a Spotloan.
Make the decision that won’t leave your credit report with a black eye.
There is no shortage of fees that companies can hit you with, especially when you are looking for cash in emergency situations. A little bit of research can help you duck those punches and make the right decision for your unique situation.