Credit card fees are no joke, and it’s an important part of the equation for how credit card companies make so much money (remember, rewards aren’t free!)
But the amount Americans pay in credit card fees every year is staggering. According to a new study by Magnify Money, that total from March 2017 into March 2018 was $104 billion in interest and fees.
That’s roughly the GDP of Ecuador.
Those purchases that are paid off after the following month come at a cost:
David Slade, Charleston Post and Courier
Think of it this way: If you’re carrying a balance on a credit card with a 21 percent interest rate, and you use that card to buy lunch, you just took out a high-interest loan to buy lunch.
The recommendation is to transfer high-interest credit card debt onto low-interest credit cards, in what’s called a balance transfer. People of a certain credit score are eligible for these, and they allow you the opportunity to pay down these credit card balances with less fees and interest incurred over time.
However these are a band-aid – the recommendation is always to pay down high-interest credit cards as quickly and fully as possible – unless you enjoy paying for someone else’s airline miles.
