Credit cards offer unmatched convenience by allowing you to transact and earn rewards with a simple swipe, tap, or dip. However, these perks often come with hidden costs. These typically come in the form of annual fees, interest rates, late payment charges, and foreign transaction fees, and they can quickly add up. The good news is that there are ways to minimize or even eliminate these expenses. By being proactive and strategic with how you use your credit card, you can enjoy all its benefits while doing away with unnecessary financial burdens. Here are some smart ways to outsmart credit card fees and charges.
Choose a Credit Card with a Waivable Annual Fee
One of the simplest ways to avoid an annual fee is to opt for a credit card that offers you the opportunity to skip it. An example of this is the Landers Cashback Everywhere Credit Card, which has no Maya credit card annual fee for the first year and is waivable thereafter. And because it also serves as both a credit card and a Landers membership card in one, there may be occasions when you can get a discounted Landers annual membership cost by using the Landers Cashback Everywhere Credit Card to pay for your renewal fee.
In case you have other credit cards with annual fees, it may be an option to call your bank and negotiate a waiver. If you’re a loyal customer with a good payment history, there’s a good chance that your credit card issuer will be willing to waive the fee. There are also banks that automatically waive the annual fee for credit card users who exceed their predefined minimum spending requirement.
Make an Effort to Fully Pay Your Balance
Credit card interest is one of the biggest expenses cardholders face. If you carry a balance from month to month, you’ll end up paying high interest on your unpaid amount. To avoid this, always pay your statement balance in full before the due date. Setting up reminders or automatic payments will help ensure that you never miss a deadline. If you can’t pay in full, at least pay more than the minimum amount due to reduce interest accumulation.
Take Advantage of 0% Installment Plans
Many credit cards in the Philippines offer 0% installment plans for big-ticket purchases. This allows you to spread payments over several months without incurring interest. If you want to use this option to manage your finances better, then always check if the merchant offers a 0% installment option before making a purchase. At the same time, be mindful of hidden fees, as some installment plans may come with processing charges.
As Much as Possible, Avoid Cash Advances
Using your credit card for a cash advance is one of the most expensive mistakes you can make. This is because cash advances come with high interest rates, transaction fees, and no grace period. Should you need quick cash, consider cheaper alternatives like personal loans or borrowing from family. If you have no options other than to take a cash advance, pay it off as soon as possible to reduce interest charges.
Use Rewards and Cashback to Offset Fees
Does your credit card offer cashback or rewards? Having a Landers Cashback Everywhere Credit Card, for instance, can get you up to 5% cashback at Landers, 2% on dining spends, and 1% on all other qualified transactions.* You can use this strategically to cover fees or reduce your overall spending. You can also redeem your points for gift cards, travel perks, or statement credits if your card has a reward program.
Be Wary of Foreign Transaction Fees
If you travel frequently or shop online from international websites, be mindful of foreign transaction fees, which can be as high as 3% per purchase. When overseas, make it a point to use a credit card that offers no foreign transaction fees to save money on international purchases. It can be a more practical idea to pay in local currency to avoid dynamic currency conversion charges or use multi-currency e-wallets to avoid additional costs.
Consider a Balance Transfer to Lower Interest Costs
If you have existing credit card debt, a balance transfer can help you reduce interest payments. There are banks that offer 0% interest balance transfer promotions. Using a program or promo lets you transfer your debt and pay it off over time without accumulating more interest. It’s good practice to check for processing fees before applying and making sure that the service will let you save money. Also, ensure you can repay the transferred amount within the promotional period to avoid additional costs.
Cancel Unnecessary Credit Cards Wisely
If you have multiple credit cards with annual fees that you rarely use, consider canceling them—but do so strategically. For instance, canceling an old credit card can affect your credit score, so weigh the pros and cons before closing an account.
Used strategically, credit cards can be powerful financial tools. By actively managing your account, negotiating fees, and taking advantage of available perks, you can enjoy the convenience of credit cards without falling into unnecessary debt. Keep these tips in mind, and you’ll be well on your way to making the most of your credit card while avoiding costly fees and charges.
*Transactions that don’t qualify include: cash in, cash advance, quasi cash purchases, casinos and gambling, fuel, supermarket, pharmaceuticals, utilities, telco, and government.
