by Tamara Brown

Created on: April 24, 2009   Last Updated: March 31, 2012

O% APR for six months! 15,000 bonus miles! Cash back! These offers may sound great but they are burying hidden costs in their fine print. Here are a few of the hidden costs that credit card companies would rather you not know about.

Introductory offers may sound good. Have you ever received an offer of a credit card with a too good to be true APR advertised? How can they let you borrow money, and earn nothing in return for their efforts? The answer is that they can't. Chances are high that the offer is only for a limited time, and after it expires, the rate will jump considerably.

A hidden fee that many people don;t know about come from using a credit card to get cash out of the ATM. First, you are charged a transaction fee of up to 3% of the withdrawn amount. Then, you are charged a higher interest rate on that amount. Any payments that you make on your account will apply to your lower interest rate first, leaving the higher APR to earn them more money for a longer period of time. Also, those "convenience checks" that are sent to you in the mail are considered cash advances and are subject to all applicable fees.

Many people use their credit cards for convenience sake, and then pay them off at the end of the month. These people should be wary as the grace period for many credit cards are being shortened. Make sure to read the fine print to make sure that you make your payment before the grace period is over. Also, if you carry a balance from one month to the next, the grace period is eliminated and you will be charge interest from the date of purchase.

Many people assume that if a purchase is about to send them over their credit limit, their card will be declined. Most banks, however, will allow the purchase to go through so that they can hit you with an over the balance fee. Lately, many banks have lowered their customers credit limits to just above their current balance. People who don't read their bill each month might not notice and on a single purchase can go over their limit and be hit with a hefty fee.

Credit card companies spend a lot of money to make it seem like they are on our side. Their offers may seem enticing with promises of low APRs, rewards and more, but before you sign on the dotted line, you need to be aware of the hidden costs that may come back to haunt you one day.

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