The 7 Hidden Ways Your Credit Card Is Costing You

1. Ignoring the fine print

Credit card agreements are written at an 11th-grade reading level, according to creditcards.com. This sounds all well and good, except the language is still too difficult for at least half of the population. 

It’s no surprise that only 26 percent of respondents to a 2016 survey conducted by creditcards.com said they read their credit card contracts. ^[1] More should. That’s where credit cards get sneaky quick. 

Here are a few things to look for while reading the fine print:

• Annual fee. Make sure you know what you'll have to pay per year just to use the credit card.
• Grace period. It used to be a full 30 days, but it keeps getting shorter and shorter. ^[2]
• Variable interest rate. Especially if there's a promotional interest rate for an introductory period.

The Consumer Financial Protection Bureau has a handy database where you can look up the terms and conditions of credit cards from more than 300 card issuers.

2. Only making minimum payments

Don't ignore the No.1 rule for responsible credit card use: Pay your balance in full each month.

It can be so easy to default to paying only the minimum that it soon becomes a habit, and this particular habit can have nasty consequences, according to Nerdwallet. ^[3] 

Your credit score will drop, you'll have to pay more per month, and the interest that your balance accrues grows over time so that you can barely make minimum payments anymore. Not only that, but it's much easier to shoot past your credit limit too.

If you find that you're unable to pay off your balance each month, it means you're spending too much and you need to adjust your budget.

3. Making late payments

Credit card companies rate your trustworthiness and ability to pay based on your past record of payments. So it's a bad idea to get into a habit of making late payments for that reason alone, but also because...

• You will be charged a late fee that can be as much as $35. ^[4]
• Your interest rate will rise to penalty APR after 60 days of nonpayment. Many penalty rates are in the 30 percent range, reports credit.com. ^[5] 
• Your credit score will go down.

A payment can be considered late if it's even one day past the due date.

4. Cash advances

If payday is still a few days away and you need money to pay your utilities or a phone bill, you might consider taking out a cash advance on your credit card. But, be careful: This can be a triple whammy.

1. You have to pay a fee for the transaction, which is usually 3 percent to 5 percent of what you plan to withdraw.
2. The interest rates for cash advances are much higher, with a median rate of 24.24 percent. ^[6]
3. There is no grace period, so the interest begins accruing on the loan the moment you wrest the cash away from the ATM.

Many credit experts recommend using cash advances as a last resort. ^[6]

5. Balance transfer fees

Having all of your credit card debt spread out over seven different cards can get confusing and hard to manage, and one solution to fix that is by taking all of that debt and loading it onto just one or two credit cards.

 While you get the advantage of only having to pay one or two bills each month instead of seven, you need to watch out for balance transfer fees, which are typically around 3 percent. ^[7]

Many banks say they offer no APR on balance transfers, but it's usually for a limited time period. 

Find out: How to Transfer a Credit Card Balance

6. Using your card too much

Maxing out your credit card is usually a bad idea. First, your credit score will drop, and hitting that maximum amount of credit could be disastrous if you aren't keeping track of your spending because paying off your balance gets harder and harder as the interest accrues. You could also trigger the penalty rate.

You should be especially careful if you don't know what your credit limit is, which can be the case for cards that use buzzwords like "gold," "platinum," or "signature" in their titles. Many times these cards don't disclose their spending limits.

7. Asking for archives

Bank of America, HSBC Bank, Capital One, and TD Bank are all card issuers that charge anywhere from $3 to $7 just for requesting a hard copy of an old credit card statement, according to CNN Money. ^[8] 

And if you need a certain transaction from a few years ago, they'll charge you for that, too – anywhere from $20 to $25 per hour of research.

While credit cards can end up costing you, they can also get you great perks, like lost luggage coverage and cell phone protection.

This article by Jess Miller was originally published on Debt.com.