What in case you transfer money to a wrong financial institution account?

Have you ever ever imagined what will show up if you by way of mistake transfer cash to a incorrect financial institution account? Will you be capable of get it lower back? Does the financial institution have the electricity to reverse the transaction? nicely, banks can’t opposite it, except they have an approval from the beneficiary. it’s miles, consequently, vital to be very alert whilst moving money to a financial institution account.

One wrong transaction can make you run from pillar to publish. Adhil Shetty, CEO & co-founder, Bankbazaar.com, says, “The most important issue to apprehend is if a transaction has been made, the bank cannot reverse it from its quit with out approval from the beneficiary. financial institution can only act as a facilitator.”

Consistent with Reserve bank of India (RBI) regulations, it’s the responsibility of the remitter to offer the best beneficiary account variety and different information at the same time as doing fee. there’s no mandatory rule by using the RBI that banks have to check every and the whole lot. it’s remitters duty to check the number two times and three times . Ashutosh Khajuria, government Director, Federal financial institution, says, “If there’s a fraud inside the payment, then it is null and void. but within the regular fee channel, if switch is affected and the credit has been made, it isn’t always easy to get returned the cash, unless the receiver concurs to go back it back”.

Here’s a primer that will help you understand what to do if you accidentally ship money to a incorrect bank account.
motives which ends wrong transactions:

Due to human (typing a wrong account range) or technical mistakes

Human errors because of discrepancies within the account variety, IFSC code or both

Technical system faults on the bank’s give up also can motive the mistake

Time for short action:

Try to inform the bank and bank manager right away after the wrong transaction

Money will get lower back for your account routinely, if the account range you referred to does not exists however in case the scenario is contrary, you need to take on the spot motion

You need to prove the financial institution in details which you transferred the cash to a wrong beneficiary’s account

If the money is credited to the account of an accidental beneficiary with the same call as your supposed beneficiary, then in that case you need to show that the switch itself turned into wrong before the bank can help. but it’s not that easy

Try and mail the matter in element to the bank for the sake of better verbal exchange
bank can handiest act as a facilitator by way of presenting you the contact number/branch name of the accidental beneficiary

Try to follow up the scenario regularly because at the give up it is your tough-earned cash
In case the transfer intra-bank, the financial institution may additionally method the recipient in your behalf and request a reversal of transaction. If the beneficiary consents, the transaction might be reversed

inside one running week

If the beneficiary is of different bank and you transferred amount by using mistake, then you have to move in my opinion to that precise branch and meet the bank supervisor to get the answer completed.
What if the incorrect beneficiary refuses to present the cash again?

You can’t take the money again with out the incorrect beneficiary’s consent. The beneficiary has to accept that the incorrect transaction is made but it’s no longer that clean
in that case, touch your bank and replace the problem virtually

To maintain a file of your whinge; continually try and mail the matter in information for higher communique

If he or she refuses to offer your money lower back then you may do a legal case as nicely however the state of affairs will become greater complicated in case your bank and your beneficiary’s banks are unique, and/or are in one of a kind towns

Taking criminal path is time eating which entails too many formalities which incorporates legal professional’s charges and so forth

If a beneficiary is okay giving your money again then it takes eight-10 operating days to get your money lower back. otherwise, you need to prove the transaction with the help of right assertion, deal with and identity proof etc.

No recovery is possible is the beneficiary contests the reversal and refuses approval
regulations to follow:

Consistent with the RBI recommendations, it’s miles the duty of the depositor to provide the correct account variety and IFSC code
there’s no rule that the banks will affirm all of the info

Rarlier than moving the money, always test twice or thrice the account number and the IFSC code
it’s miles always recommended to switch a small amount of money. Like Rs.a hundred, as a take a look at to affirm that the amount is transferred to the proper beneficiary

Try to double test the digits after typing and for on-line price test switch is the safest mode
try to bitch immediately to the priority financial institution for incorrect transaction and respond the bank as quick as viable. at the end it’s your tough-earned cash, so be careful whilst you switch the cash.

Why It Might Be Time to Switch Banks

Worried couple paying bills online.
Switching banks is easier than we think, according to a recent survey.

Conducted by Harris Poll for BancVue, the study of more than 1,000 U.S. adults found that 61 percent of those who have never switched banks believe that switching would be at least somewhat difficult. That figure goes as high as 69 percent for millennials, the generation defined as people ages 18 to 34.

But 81 percent of people who have switched banks say it wasn’t difficult at all. BancVue is a Texas-based financial services company whose products include Kasasa, a national brand of free checking accounts offered at nearly 300 community banks.

BankVue Chief Executive Officer Gabe Krajicek says in the release:

“There’s no reason for Americans to stick with a bank that isn’t serving their needs. … And the long-term benefits of finding the right institution far outweigh the short-term hassles of moving.”

Americans seem to be enticed by higher interest rates and better banking products, according to the survey.

Forty-five percent of people would switch banks for a higher interest rate, and 25 percent of people who have switched banks did so because they were dissatisfied with the products their prior bank offered.

For a step-by-step guide to finding a new bank or credit union, check out “Loathe It? Leave It! 5 Simple Steps for Switching Banks.”

Why Some Travelers Are Making a Big Credit Card Mistake

Dollars and Euros

The dollar is so strong these days, especially against the euro, that it is spurring many Americans to chase their dreams of visiting the Eiffel Tower in Paris, riding a gondola through the canals of Venice or hiking the majestic Bavarian Alps.

It makes a lot of sense. By traveling when the dollar is strong, you can save yourself a small fortune. That helps bring down the cost of foreign travel to a level that seems manageable to many Americans who might have previously felt those sorts of trips were beyond their reach.

Some unscrupulous merchants abroad might try to take advantage of the dollar’s strength — and your enthusiasm — to fill their own pockets a bit more with a sneaky tactic called “dynamic currency conversion.” However, if you keep alert and know what to look and listen for, you can head these bad guys off at the pass before they’re able to rip you off.

The Dynamic Currency Conversion Trap

Here’s the situation: Say you’re at a shop near the Eiffel Tower in Paris. You’ve just spent a day taking in all the sights in one of the world’s most spectacular cities, and now you’re buying a bottle of wine and some bread and some cheese so you can have a picnic in the park and relax as the world passes by. You even splurge a little bit on the bottle because the dollar is strong and because, well, it’s Paris.

You walk up to the counter and pull out the chip-and-PIN credit card you got specifically for your trip because you’re a savvy traveler. (And since you’re a savvy traveler, you also don’t have to worry about your bank refusing the transaction because you took the time to call the bank before you left to tell them where you were going and when you’d be there.)

“Bonjour, madame,” the man behind the counter says. Then, in broken English as he holds your credit card, he says, “Would you like for your transaction to be done with dollars or with euros?”

You pause. “Oh, I didn’t realize I had a choice. But I guess since the dollar is so strong, I’ll go ahead and pay in dollars.”

And you’ve just fallen into the trap.

It’s called dynamic currency conversion, and paying in dollars instead of the foreign currency is pretty much never a good idea, even though it sounds like one.

Reasons to Avoid Dynamic Currency Conversion

Here’s why paying in dollars is a bad idea:

Your credit card issuer offers a better exchange rate than a merchant ever could. In this situation, the merchant — not the credit card company — is doing the currency conversion. That’s a problem. Credit card exchange rates are pretty hard to beat. That small Parisian merchant wouldn’t be able to match that. The currency exchange booth at the airport won’t be able to either.

The merchant will likely tack on a bunch of fees. If you just let your credit card issuer do the currency conversion, there’s a good chance you won’t pay any extra fees for the service. That’s because most credit cards haveeliminated foreign transaction fees. Those fees used to add 1 to 3 percent on top of your bill when you purchased something overseas, but not anymore. In recent years, those foreign transaction fees have become far less common.

Let the merchant do the conversion, and it’s a different story. The fee a merchant will charge you for this service can reportedly run as high as 7 percent of the transaction. So make sure the card you travel abroad with doesn’t charge extrafor foreign purchases.

The merchant might not give you all the details. Don’t expect full disclosure of fees if you agree to dynamic currency conversion. Stores in tourist areas of major European cities are busy and crowded, and sometimes a cashier just won’t think to give you all the information you need. And then, of course, there’s the more sinister possibility: They know that it is a bad deal and don’t want you to know what fees will be added on to the charge.

What You Should Do Instead

If someone asks you if you want your credit card transaction to be done in dollars instead of the local currency, the solution is simple: Just say no.

There will be times when a store owner won’t take no for an answer, however.

Thankfully, this doesn’t happen often, but if it does, you have a couple options. You could either offer to pay cash for the items, or you could simply walk away. There’s a good chance that the merchant will give in if he thinks that pushing currency conversion will cost him a sale. If he doesn’t give in, however, just keep walking. Chances are that you’ll be able to find that bottle of wine and cheese at some other store that will be a bit more welcoming.

Finally, when your trip is over, be sure to go over your credit card statements with a fine-toothed comb. Keep your eyes open for any charges that seem unusual for any reason, and don’t hesitate to call and ask the bank about anything that looks amiss. After all, the last thing you want is for some unscrupulous storekeeper to take advantage of you and tarnish your treasured memories of a magical, once-in-a-lifetime trip.

How to Find the Best Travel Rewards Credit Card for You

Young female passenger at the airport, using her tablet computer

Choosing a travel rewards credit card can be overwhelming. Every week, American consumers receive millions of pieces of direct mail from credit card issuers offering large sign-on bonuses and fast ways to travel for free. If you search for the best travel card on Google, you will be presented with millions of results. It can be very difficult to find the best card.

Most credit card comparison tools are either blog posts or static lists of credit cards. One of the oldest in the market is CreditCards.com, which has a page dedicated to travel and airline credit cards. The top result is the Capital One Venture Rewards Credit Card.

Is Capital One Venture the best card for everyone? As my research reveals, it depends upon your situation. I used the customizable tool at MileCards.com to review three different scenarios, and I received three different recommendations. Now more than ever personalized recommendations are important to earn the best rewards.

Scenario 1: The Frequent Flier

Bob flies United Airlines all the time for business. He is earning 50,000 miles every year from business travel and wants to top up those miles with a credit card. He spends about $3,000 each month on his personal credit card and about $800 of that is in restaurants.

Based upon Bob’s information, the recommendation was the Chase Sapphire Preferred Card. The card allows you to earn 2 points for every $1 you earn on dining, and you can transfer the Sapphire points directly to United Airlines. Including the first year bonus, Bob would earn 91,600 points in the first 12 months. Capital One Venture doesn’t allow you to transfer points to existing frequent flier programs, and would not have been the best option for Bob.

Scenario 2: The Infrequent Flier With Hawaii Dreams

Sarah never flies. A recent graduate, she wants to visit Hawaii soon, but only if she can get a free flight. And she doesn’t want a card with an Annual Fee. She spends about $1,000 a month, and most of it is spent on groceries and gas.

After inputting Sarah’s information, the Amex Everyday Credit Card was the top result. There is no annual fee on the credit card. You earn 2 points for every $1 spent in grocery stores, up to $6,000 each year. And Sarah can transfer those points directly to Delta Airlines. In the first 12 months, Sarah will earn 31,600 points. So long as Sarah pays her bill on time and in full every month, those points won’t have cost her a dime. That would be enough for a flight anywhere in the continental United States and she would be on her way towards that Hawaii trip.

Scenario 3: The Big Spender

Emily has a big job and likes to spend what she earns. She spends $4,000 a month on her credit card and pays the balance in full every month. Her spending is evenly split between travel, clothing and restaurants. Emily is always looking for ways to get more free travel. And Emily isn’t afraid to pay an annual fee if she is able to get value.

After inputting Emily’s information, the top recommendation is the Citi Prestige Card. There is a steep $450 annual fee. However, the rewards are significant, especially in the first year. Although Emily has to pay the $450 fee, she will get $250 of air travel credit. So, on the next flight that she books using the Citi Prestige Card, she would immediately get $250 of her $450 fee back.

She would earn 3 points for every $1 spent on travel and 2 points for every $1 spent on travel. Even better, after Emily spends $3,000 she would receive a 50,000 point welcome bonus offer.

So, during the first 12 months, Emily would earn 135,200 points with a true cost of $200 (after the refund of the air travel). MileCards values those points at $1,993. Emily is more than happy to spend $200 to receive $1,993 of value.

The Best Travel Credit Card of 2015: It Depends

The right travel rewards credit card really depends upon your unique situation. It pays to do your homework and find the card that meets your specific needs. The Capital One Venture Rewards Card recommended by CreditCards.com isn’t a bad card. But it may not be the best card for your situation. That is why is you should look for tools, like MileCards, that provide personalized results.

Just remember, these cards are only worthwhile if you have a lot of self discipline. If you don’t pay your balance in full and on time every month, you will be hit with steep interest charges. The interest you would pay on your credit card debt would likely end up costing much more than the free travel that you receive. But if you have the discipline to make your payments on time every month, free travel awaits.

The Postal Service Wants You to Bank at Your Post Office

Congress Keystone
J. Scott Applewhite/APSen. Elizabeth Warren, D-Mass.

Elizabeth Warren would like to change the way you bank.

The Massachusetts Senator and consumer advocate firebrand may not be running for president. But her backing of the U.S. Postal Service’s plan to begin offering budget-priced banking services to U.S. savers could remake the American landscape regardless.

An Idea Whose Time Has Come?

In May, USPS admitted to losing $1.5 billion in its most recent fiscal quarter. If the losses keep up at this rate, the Post Office’s budget deficit could surpass last year’s $5.5 billion loss, and swell into a $6 billion annual deficit. Last month, though, the USPS Office of Inspector General refloated an idea to close the Post Office’s budget gap. Simply put, the Post Office should turn itself into a bank.

Not entirely, of course. Under the Inspector General’s plan, backed by Sen. Warren, USPS would still deliver mail and such. But it would also begin expanding the kinds of financial services it offers, permitting “unbanked” and “underbanked” customers to take out small loans, cash checks, pay bills, and open savings accounts — all at their local post office. According to the Inspector General, entering this market could help USPS reap as much as $10 billion in annual revenue — and close its budget gap with a resounding snap.

Even just expanding the financial services the Post Office already offers, by adding electronic wire transfers and ATMs to existing offerings of selling paper money orders and prepaid cards, and executing international money transfers, could raise as much as $1.1 billion in additional revenues for USPS.

An Idea Whose Time Came a Year Ago …

USPS actually first voiced this suggestion early last year (when it was promptly and publicly taken up by Sen. Warren). Back then, Warren explained that 68 million Americans currently have no active checking accounts, yet still need the kinds of banking services associated with such accounts. To get these services, they pay through the nose.

According to Warren, banks and — in particular — payday loan and check cashing stores, charge unbanked customers “an average of $2,412 per household” annually for ordinary financial services. The Senator notes that “the average underserved household spends roughly 10 percent of its annual income on interest and fees — about the same amount they spend on food.”

What It Means to Them

This means that in one fell swoop, expanding financial services offerings at post offices could both solve USPS’s chronic budget deficit and prevent millions of Americans from being overcharged for basic banking services.

No longer would the “unbanked” be stuck paying high monthly service fees to maintain a bank checking account with a too-low balance, or even higher costsfor small loans from a payday lender. These low-margin activities, too unprofitable for many banks to bother with them, could be offered at the post office instead. As a side benefit, these folks would then have thousands of extra dollars a year to spend on things they actually want to spend their money on, helping to grow the economy.

What It Means to You
Of course, if you already have a bank account, you may think USPS’s plan is interesting, but not really relevant to you. It could become relevant, however.

In recent months, we’ve seen multiple stories of traditional banks closing down their physical branches to cut costs and take advantage of the cheapness of online banking. SNL Financial reports 332 bank closures across the U.S. in the first quarter of 2015. One single bank, JPMorgan Chase (JPM), says it’s planning to close 300 branches over the next two years.

Assuming this trend continues, finding a physical branch of your bank at which you can cash a check or get a money order when you need it could become increasingly difficult. Knowing that the local post office can help you out, on the other hand, could turn increasingly attractive.

Motley Fool contributor Rich Smith doesn’t own shares of any of the stocks mentioned above. (Nor does The Motley Fool.) Rich admits, he does most of his own banking online. But he’s willing to give post office banking a try if it will help poor folks out, save the Post Office and thereby secure our Strategic National Junk Mail Reserve.

Is American Faith in Banks Finally on the Mend?

Getting the cash
Wounds of the Great Recession are slow to heal when it comes to confidence in the banking industry. Gallup recently released results of a phone survey that found that only 26 percent of Americans have “a great deal” or “quite a lot” of confidence in banks. The number is the same as last year, but higher than the historical low of 21 percent in 2012.

This doesn’t mean that three-quarters of Americans are keeping their money under their mattress. Gallup also found that an additional 43 percent had “some” confidence in banks, while 28 percent had “very little” and 2 percent had “no” confidence.

Banks, like other large institutions, have taken a big hit in confidence in recent years, but still rank in the middle of the 17 institutions about which Gallup collects opinions. Banks did best in 1979, the first year Gallup started asking the question, when 60 percent of Americans had confidence in banks. It dropped to 30 percent in 1991 during the height of the savings and loan crisis. From there it drifted up to 53 percent in 2004, but fell off a cliff during the Great Recession, bottoming out in 2012.

A person’s politics seem to be a factor. Gallup found the Republicans are most likely to have confidence in banks, at 35 percent, followed by Democrats at 27 percent and independents at 25 percent.

Similarly, 39 percent of people who are generally satisfied with the way things are going are confident in banks. But only 24 percent of those generally unsatisfied are confident.

The phone survey of 1,527 adults was taken June 2-7 and has a margin of error of plus or minus 4 percentage points.

How a Quick Call Can Change 4 Things About Your Credit Card

Girl with computer and credit card
A simple phone call can potentially save you hundreds of dollars, improve your credit score, score you extra frequent flier miles and more — and your chances of success are higher than you’d imagine.

Most people never make that call, though. Maybe they’re too busy. Maybe they don’t know what to say. Maybe they don’t think it will matter.

It does matter — and consumers’ reluctance to make that call can cost them.

Of course, not everything can be fixed with a phone call. For example, if your payment is late for the fourth time in six months, don’t expect the bank to cut you any slack. But many things can be tweaked or improved if you take the time to call your card issuer.

Here are a few examples:

Late Payment Fee

A CreditCards.com survey last year showed that 86 percent of cardholders who asked to have a credit card late payment fee waived got their wish.

The problem is only 28 percent of cardholders have asked. While not everyone has been late with a payment, chances are lots of cardholders are paying those fines without knowing that a simple call could get them out of it.

Some card issuers — Discover being perhaps the most prominent among them — advertise that they won’t charge a late fee on your first late payment. Many other card issuers will waive the fee for some of their cardholders, but only if the cardholder asks.

A good record of on-time payment can help seal the deal. When you call, make sure the bank knows you’re rarely late and that it won’t happen again.

Interest Rates

That same survey also revealed about 2 in 3 cardholders who requested a lower interest rate got one, but just 23 percent had ever asked. Again, that means a large number of cardholders are missing out on a large amount of savings.

How big? Consider this:

  • If you have a $5,000 balance on a credit card with a 20 percent interest rate and pay $150 a month, you’ll pay $2,359 in interest before paying the card off over 50 months.
  • Lower that interest rate to 15 percent and keep everything else equal, you’ll pay $1,508 in interest in just 44 months. That’s a savings of $851!

Could you get your card issuer to lower your APR as much as 5 percent? Maybe or maybe not. But even lowering that APR to 18 percent — just a 2 percentage point drop — would save you about $375 in interest.

Credit Limit

An increased credit limit can do wonders for your credit score. That’s because it can quickly shrink your credit utilization ratio — how much debt you have compared to your available credit. For example, say you have $5,000 in available credit and $2,000 in debt. That means your credit utilization is 40 percent, well above the recommended goal of 30 percent or less. However, if you can increase your credit limit to $7,000, your utilization rate suddenly drops to an acceptable level of 29 percent. Your credit score is likely to improve as a result.

Be cautious, though. Don’t expect the bank to double your credit limit. You can likely improve your odds of success if the increase is a baby step rather than a giant leap.

One temporary downside: Your credit card issuer might do a hard pull of your credit when deciding whether to increase your limit. With any hard pull, you will likely see a small, temporary decrease in your credit score. However, the long-term benefit of the higher credit limit will likely outweigh any brief hit your credit might take.

Sign-up Bonuses

This is a move you’d need to make before you actually get the card, and you’ll need to do some homework to make this work.

Say you’ve received an offer in the mail from your bank for a card that you really like. The card comes with a low APR, no annual fee for the first year, no foreign transaction fees and a 20,000 point sign-up bonus. Sounds great, right? Yes, except for the fact that you’ve gone online and seen other offers of 40,000 or 50,000 points.

Well, if your credit is excellent, there’s a good chance that you can have those points. Just give your bank a call, tell them about the other great offers that you’ve seen and ask the bank to match the offer. Again, if you’ve got strong credit, you’ve got a good chance of success.

No Guarantee of Success

As mentioned, data has shown that cardholders are more likely to have their requests granted than they’d expect. But that doesn’t mean any of these are a slam dunk. The reality is that people with the best credit get the best treatment, the best rewards, the lowest APRs and the most fees waived.
Before you pick up the phone to talk to your bank, be sure you know where you stand with your credit. Get a free copy of your credit report fromAnnualCreditReport.com, and dispute any errors or omissions you find. Get your FICO credit score. And of course, pay your bills on time, every time, in the weeks and months leading up to your request. These moves can help increase the chance that the next request you make will be a success.

7 Dangerous Credit Card Mistakes You’re Making

Using a credit card.
Consumer credit makes buying the stuff we want and need easy and convenient. Credit can also bail us out of a jam, especially if our emergency funds aren’t quite up to the task. Unfortunately, that convenience comes at a price. Aside from uncontrolled, in-the-moment spending, credit card use opens us to a variety of dangerous financial mistakes, some with long-term effects.

You probably already understand the dangers of running up those credit card balances, but here are few more dangerous mistakes you may be making, plus some tips on how to avoid them.

1. You only pay the minimum due. Banks use several formulas to calculate the minimum amount due each month. Most start with a percent or two of the outstanding balance and then add in any fees for late payments, exceeding the credit limit and monthly interest charges. However it’s calculated, simply paying the minimum will result in lots and lots of interest payments over time.

You can find out how your credit card issuer calculates the minimum payment by visiting your issuer’s website. Your bank’s site may also include a calculator that shows you how long you’ll owe — and how much interest you’ll pay — if you merely pay the minimum. If not, try this credit card debt calculator.

2. You pay late. According to FICO, which generates credit scores, payment history is the largest component of a credit score — 35 percent of the score, in fact. This makes sense because lenders want to know how promptly borrowers have paid in the past, and nobody likes getting paid late. Late payments mean a lower credit score.

There’s a second danger here as well. Late payments will result in late payment fees from your bank, which not only cost you a bit more (or a lot more, depending on your agreement), but may also boost your monthly minimum (again, depending on your agreement).

3. Your utilization ratio is too high. After payment history, FICO looks at “amount owed,” which makes up 30 percent of a credit score. The key calculation here is the borrower’s credit utilization ratio, which is how much available credit you use. For example, if you have a card with a $5,000 credit limit and a $2,500 balance, your utilization ratio is 50 percent. In generating the score, FICO analyzes each account and the total of all your accounts.

A high utilization ratio can harm your credit score, which impacts your ability to secure loans on favorable terms. It also means you have less credit available for emergencies. High utilization ratios may also indicate some deeper financial difficulties. If yours is creeping up, it may be time to do some serious budgeting.

There is no hard-and-fast rule, but many personal finance experts advise consumers to keep their utilization ratio below 30 percent.

4. You don’t read your statement. With more banks pushing us toward paperless billing and automatic bill pay services, it’s getting easier to skip looking over the monthly statement. The first danger here is that you may overlook erroneous charges and pay for products and services you haven’t actually bought. You may even miss that you have been a victim of identity theft or other forms of credit fraud.

A more subtle danger associated with ignoring the monthly credit card statement is personal finance complacency. When we don’t review and monitor our spending, we stop being in command of our finances, making it that much more difficult to reach our personal finance goals, whatever they may be.

Set aside a few moments every month to review your statements, whether paper or digital, and make it part of a monthly budget review routine.

5. You haven’t read the fine print. Do you know how your credit card issuer calculates and applies interest? Do you know what the fees are for late fees or credit limit overages? What about fees for cash advances?

Your bank is required by law to make all of that information available to you (and more), in an easy to read and understand format called the “Schumer box,” after Senator Charles Schumer of New York, who championed the law.

Before you apply and sign up for any credit account, make sure you understand the key terms spelled out in the Schumer box.

6. You apply for too many accounts at once. Every time you apply for a credit card you trigger a credit score inquiry. A couple inquiries won’t impact your credit score, but several inquiries in a short period of time will affect your score, although the effect is minor. Experian, one of the big three credit bureaus, notes that while minor score adjustments don’t harm those with good or excellent credit, consumers with weaker scores are at greater risk. Even a modest reduction in score, combined with other risk factors, can make it harder to secure additional credit.

There is an exception: Multiple inquiries made while rate shopping home and auto loans within a 30-day period are treated as a single inquiry.

7. You take cash advances. If you look at the line item for cash advances on your Schumer box, you may be stunned by the interest rate your bank charges. A May CreditCards.com survey found that the average for cash advances is 23.53 percent — or 8.54 percent higher than the average rate for purchases. Some banks even charge as much as 36 percent for cash advances! But the dangers of cash advances mount. Unlike charges for purchases, most banks begin applying interest the moment the advance is taken — and this is on top of the 5 percent fee most charge to execute the advance.

Needless to say, consumers are wise to avoid cash advances, lest they find themselves caught on a never-ending debt treadmill.

New Credit Card Fees You Need to Know About

handsome latin business man worried paying bills on couch
New research shows that credit card providers are going the way of airlines and slamming customers with more fees.

In an analysis of 100 U.S. credit cards, CreditCards.com found that the average card now charges six fees — though some tip the scales at double that number.

They include some of the usual suspects, such as late payment and cash advance fees (charged by 99 and 98 percent of credit card providers, respectively).

But others might surprise you. For instance, some providers hit credit card holders with annual fees for adding an authorized user to an account, while others are guilty of charging customers for copies of monthly statements.

The survey even found one provider that charges a $25 reopening fee to clients who have second thoughts about closing their accounts.

And as mobile payments grow increasingly popular, watch out for alternative payment method fees — which might fine you for making a plastic-free payment.

Avoiding paying by phone will let you bypass that particular fee, but it’s harder to escape others, like a one-time processing fee. In some cases, a consumer has to fork over $95 before even swiping a card for the first time.

These research findings are a reminder to use credit with caution, and there are some general best practices that can still help you minimize fees.

Setting up automatic payments or calendar reminders to pay your bill can save you from late fees, while resolving to make your cash withdrawals with a debit card frees you from worrying about cash advance charges.

How to Escape the Credit-Card Fee Trap

CN78NG Couple working out finances  couple; computer; laptop; finances; man; woman; 2; two; finance; money; bank; business; woma
NEW YORK — Tired of getting hit over the head with costly credit card fees?

You may find it tough to avoid them altogether — a recent survey of 100 cards by Creditcards.com found only one with no fees at all and two cards with a dozen (literally) — but it’s still possible to cut your costs significantly.

“You can avoid most of these fees by taking two steps,” said Matt Schulz, senior industry analyst at CreditCards.com. “Shopping around when you’re first getting the card and setting up auto-payments once you get the card.”

Schulz said that it’s important to look at the terms and conditions before applying for a card. Afterward, setting up “auto-pay” will help you to avoid one of the most-common fees: a late charge, he added. Other frequent charges include annual fees, balance transfer fees, foreign transaction fees and cash advance fees.

In the Creditcards.com survey, 99 percent of the the cards charged late fees and 81 percent had returned payment fees, typically $35.

Still, credit-card users are better off in many ways than a decade ago. With the implementation of the Credit Card Accountability, Responsibility and Disclosure Act of 2009, also called the CARD Act, late fees were capped at $27 for the first late payment and $38 thereafter.

“The CARD Act really just slashed a lot of the fees,” said Linda Sherry, director of national priorities for Consumer-Action.org. “They made it much more consumer friendly.”

Twenty-six percent of cards in the CreditCards.com survey had an annual fee ranging from $25 to $195, while nearly 80 percent charged balance transfer fees that were typically 3 percent of the transfer amount. Foreign transaction fees were found on 77 percent of the cards, usually charging 3 percent of each transaction in U.S. dollars, according to the survey.

Finally, 98 percent of cards surveyed charged cash-advance fees, ranging from $10 to as much as 5 percent of the advance amount.

Other less common fees, according to Creditcards.com:

  • Account re-opening fees
  • Overdraft protection fees
  • Statement hard-copy fees
  • Pay-by-phone fees
  • Replacement card fees
  • Expedited card-shipping fees
  • Stop-payment fees.

The most obvious way to limit fees, of course, is maintaining a good credit score, since lenders tend to offer the best deals to the customers most likely to pay back what they borrow. That said, here are the three cards that placed at the top and the bottom of the survey:

No Fee

The PenFed Promise Visa Card, which has no fees, is issued by the Alexandria, Virginia-based PenFed Credit Union. (The name is a reference to the Pentagon, not the state of Pennsylvania.) Established in 1935 as the War Department Credit Union, the institution has more than 1.3 million members in all 50 states as well as Washington, D.C., and military bases in Guam, Puerto Rico and Okinawa, according to its website.

Sherry recommends credit unions because they often offer better deals for their members.

“It’s a great card,” said Sherry. “Almost anyone can join some kind of credit union, somewhere, and they should look into their credit union card.”

First Premier Bank Credit Card and First Premier Bank Secured MasterCard, issued by Sioux Falls, South Dakota-based Premier Bankcard, topped the list with 12 fees. One fee noted by Creditcards.com is a $25 charge when customers qualify and receive increased credit limits.

First Premiere is a subprime lender, which caters to people with a poor track record on bill payments. Its “primary purpose is to provide individuals with damaged credit histories an avenue to obtain credit through the use of a credit card,” according to the company’s website.

“We actually advocate for secured credit cards as a way to build credit,” said Consumer-Action’s Sherry. “As you build credit and show that you are responsible for using a credit card and paying it back, then you can go out and get an unsecured card.”