Credit card conveniences that cost you

credit card, credit card feesLet's face it, a big part of the appeal of credit cards is the convenience. They're easy to use, let you pay quickly, earn rewards and defer payments for a month or so. But in the name of even more convenience, credit card companies offer all sorts of other services. Some, while they're pitched as conveniences for you, are actually ways for the card companies to take more money from you.

As this article
by Investopedia.com points out, a few of the biggest offenders when it comes to pricey "conveniences" are better off ignored.

Cash advances

One of the biggest offenders is convenience checks. While they might look like your ordinary check, read the fine print. Those "checks" are actually cash advances, and it comes with an interest rate that's several percentage points higher than your ordinary APR.

Getting cash from an ATM with your credit card is just as bad, says Curtis Arnold, founder of CardRatings.com, who says card issuers pile on a "triple whammy" of fees and charges. First, there's that extra-high interest rate you'll have to pay, compounded by the fact that most cards offer no grace period on cash advances. That's right; you start accruing interest the second the ATM spits out those bills. Finally, Arnold points out, card companies also charge you a "cash advance fee," and these are also sky-high. "Those cash advance fees are steep," says Arnold. "Some will say either $10 or 5%, whichever is greater." In other words, hit the ATM for a 20-spot and you'll be paying a 50% premium for the privilege, plus interest.

Payment insurance

We've covered this one before. This "insurance," which promises to pay your bills if you have an accident, lose your job or source of income, may sound appealing, but there's a catch. The fine print on these programs includes a bevy of conditions and caveats that prevent many users from being able to make a successful claim. What's more, the program only covers your minimum monthly payment, and most are only in effect for a short period of time before you're back on the hook for those bills.

Identity theft protection


"It's totally worthless," says Arnold of this service, which can be marketed by different names. Generally, these services offer to contact your other card companies if your wallet is lost or stolen -- for a monthly fee of $5 or so. Most of us only carry a few cards anyway, so you could be paying $60 each year -- or more -- to save yourself 10 minutes on the phone. What's more, if you contact a credit bureau to report that there's been fraud committed on one of your credit accounts, they're required by law to contact the other two bureaus, and you don't pay a penny for that protection. Also, most cards these days come with zero-liability policies, so as long as you report the loss or theft in a timely fashion, you won't have to pay for any charges incurred. Again, all for free.

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