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Exception fees making billions of dollars every year for the banks when do you use your account outside of the terms and conditions. Exception fees can be charged if you bounce a cheque, miss the credit card repayment or go over your credit card
limit and while these fees can seem minimal at the time, as they are
often only around $20 each time, these costs can add up. but don’t
worry because if you do slip up and mismanage your credit card balance
it is possible to negotiate your way out of overdrawn fees.
Therefore learn more now
about how to avoid overdrawn fees when you go over your credit card
limit as not only are these exception fees often some of the highest
they are also the worst kind for your credit rating.
1 Make an automatic
monthly credit card repaymentIf you use your credit
card regularly every month, whether for bills and expenses or for an
indulgence here and there, you will know the average amount of your
monthly credit card repayment and can therefore set up an automatic
direct debit from your transaction account to your credit card for the
due date. This means you don’t half to remember to make the payment
and you don’t have to worry that interest charges applied to your
purchases will put your balance over the limit, incurring overdrawn
fees.
Plus if you are working
to repay a rolling credit card balance you can set up a direct debit
to your credit card of an amount which you know will be more than a
monthly repayment so you can repay your balance sooner.
2 Know your credit card
balanceThere is no doubt that
credit cards are a convenient way to make every kind of purchase big
or small, online, in person or automatically. As a result there can
be charges coming out of your credit card account left right and centre
to cover other monthly bills or everyday purchases. Therefore while
you set up these automatic payments from your credit card account so
you don’t have to think about them it doesn’t mean you can forget
about your finances entirely, instead make sure you know about the other
charges which are coming out so you know how much you have to spend
up to your limit.
Also get into the habit
of thinking before you make a purchase on your credit card and check
your balance regularly, you probably have the application on your mobile
phone to allow you to do just that wherever you are. If you’re not
sure how much credit is available before you reach your limit and your
account becomes overdrawn then wait to make the purchase unless it’s
an emergency.
3 Know the type of card
you haveThe type of credit card
you have can determine whether you will send your account over the limit
with an emergency purchase if you can’t check your balance. For example
if you need to make an emergency purchase to get your car back on the
road or pay a doctor’s bill for example but you are not sure if you
have enough credit available using an American Express credit card for
example will give you several days to cover the cost of the purchase
as the credit transaction will not be processed right away, allowing
you to avoid overdrawn fees if there is not enough credit available.
However with a MasterCard or Visa card for example the money is debited
from your credit account at the time of the purchase and if there are
not enough funds available your account will become overdrawn.
4 Budget for your credit
card useIf you make purchases on
your credit card up to only the value you can afford to repay with your
wages from that month then you will avoid going over your credit limit
and being charged a fee for an overdrawn account. Managing exception
fees is about managing your finances and while Internet banking and
mobile phone applications make it easier to automate your banking there
is no substitute for following a detailed budget and scheduling your
credit card repayments as a priority bill.
How to Negotiate Overdrawn FeesOnce a fee is charged to
your credit card account it can seem like the process is finalised however
it is possible to be credited for overdrawn fees if you are able to
successfully explain the situation and negotiate with your credit card
provider. While it is not a foolproof plan tried these negotiation tips
for a refund of overdrawn fees on your credit account:
- Remain polite and
calm. Regardless of the reason your account is overdrawn – you and
your wife both scheduled payment for the same deal at the same time,
or you both thought the other had made the repayment this month –
be polite when you call your credit card provider to ask for a refund
of the overdrawn fee. - Admit you were at
fault. If you take the time to explain the situation to your credit
card provider chances are they will be willing to let you off the hook
for this overdrawn fee. Take responsibility for mismanaging your account
and explained what happened, whether you thought a cheque was going
to clear in time or you paid too many bills from one account. - Make sure they know
who you are. When talking to your provider make sure you mention that
you are a long-standing customer, and that you have other accounts with
the bank. Sometimes banks need to be reminded of this in order to give
you what you want, because for a bank it is cheaper to keep you as a
happy customer than to find a new customer to replace you if you leave
in disgust over an overdrawn fee. - Make your request
firmly. While still being polite be confident in your approach, saying
‘I’d like to have the fee removed’ rather than ‘Is there any
way you could possibly have that fee removed at all?’ Also don’t
ask questions which will give your bank the chance to say no so rather
than saying ‘can you help me?’ ask ‘what can you do to help me?’ - Call back later.
If you are denied a refund of an overdrawn fee when you call your provider
try calling again because chances are you will get a different representative
who may have a different feeling about your situation and will credit
your account.
However, don’t rely on
being able to talk your way out of overdrawn fees every time you go
over your credit limit because credits on your account and fee waiver
requests will show up each time you call and if you do so on a regular
basis you will simply be pointing out to your credit card provider that
you are not their most responsible customer.
Alban is a personal finance
writer providing tips and advice on how to compare
credit cards online ---
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