02/2020 KIPLINGER’S PERSONAL FINANCE 59You can also call your issuer and
request a credit-limit increase. Even if
you don’t want to spend more on your
card, a higher limit could boost your
credit score if it will decrease your
credit-utilization ratio—the amount
of credit that you use as a percentage
of your card limit.
Balance transfer. Some cards offer
an attractive rate (often 0%) for a set
period for balances you transfer from
other credit cards. However, you may
pay a fee of 3% to 5% of the amount
you transfer. You can find exceptions:
CHASE SLATE and AMERICAN EXPRESS
EVERY DAY offer 0% interest for the first
15 months and levy no fee if you make
the transfer within 60 days of opening
the account. You’ll still have to make a
monthly minimum payment, and after
the introductory period closes, you’ll
likely be charged a variable rate in the
double digits. Or consider a card with
a low fixed rate on transfers. Such
cards are most commonly offered
through credit unions, says Ted
Rossman, of CreditCards.com.Cash advance. A cash advance, which
allows you to withdraw cash against
your credit line, should be a last resort.
It typically comes with a hefty fee that’s
the greater of about $10 or 3% to 5%
of the amount withdrawn. And you’ll
be slapped with interest immediately,
often at a rate that’s much higher than
your APR for purchases.
An ATM withdrawal with your
credit card is only one way to incur
a cash advance. If you use your card
as a backup source of funds in case you
overdraw your bank account, any over-
draft transfer from your card will likely
be regarded as a cash advance. If you
write a convenience check—which
your card issuer may send you in the
mail to use much as you would a checktied to a bank account—the with-
drawal will be considered a cash ad-
vance. If your card permits gambling
transactions (many don’t), such as for
online gaming, they may be treated
as cash advances, says Rossman.Fees, fees and more fees. Choose and
use your credit card carefully and you
can dodge fees. Annual fees often come
with cards that offer rich rewards in
cash back, points or miles. The fees
are commonly in the neighborhood
of $100, although they can run much
higher for premium cards. Some cards
waive the fee for the first year of card
membership. An annual fee may be
worth paying if you reap enough in re-
wards and benefits. But you can find
many generous rewards cards that
don’t have an annual fee.
Cards that carry a foreign-transaction
fee ding you every time you use your
card outside the U.S.—usually about
3% of the transaction amount. The
number of cards that charge such
fees is on the decline, and most travel-
oriented rewards cards don’t have
them. Some issuers, including CAPITAL
ONE and DISCOVER, omit the fee on all
of their cards. If your card does have a
foreign-transaction fee, avoid using it
on a website based in another country.
“You could be at home shopping in
your pajamas and end up getting hit
with a foreign-transaction fee,” says
Matt Schulz, of CompareCards.com.
A credit card’s late-payment fee is
limited by federal rules, and the cap
is adjusted annually for inf lation.
In 2020, a card issuer may charge as
much as $29 for the first violation and
$40 for any subsequent late payments
in the following six months. If you
miss a payment, ask the issuer to
waive the fee—there’s a good chance
you’ll succeed if you’ve otherwise been
a reliable customer. The CITI SIMPLICITY
and PENFED PROMISE cards charge no
late fee, and Discover doesn’t levy the
fee for the first late payment on any
of its cards. ■
YOU CAN CONTACT THE AUTHOR AT LISA_GERSTNER@
KIPLINGER.COM.