A Service Fee is something that you have to pay your creditors before they agree to accept and settle your account. You have to pay this fee monthly. In some cases this monthly fee can be as much as a few hundred dollars per month. If you don’t want to pay this fee monthly, you can drop it off or ask for a reduced amount when you make the monthly payment. Most creditors will reduce the Service Fee according to your payment history with them.
You have to ask the question, what is a service fee? You may be surprised at this question. You see, you paid your creditors a bill and now you are expected to pay them. You may find that this is a big new addition to your debt and not something you really like paying. So, do you pay this fee each time you make a payment or do you just pay it once?
When you make a monthly payment, it usually doesn’t come all at once. It comes in a little bit every month until it is paid off. Each time you miss a payment, you will more than likely be assessed a late fee. This late fee could be costly and tack up a lot of interest on your balance if you don’t already have a high interest rate. Plus, many times it can actually be more than the monthly payment you were making.
If you don’t think that you will ever get out of debt, then just settle your accounts every month. This way you only have to worry about one payment. This can save you a lot of time and headaches. Plus, you will save yourself from accruing late payments fees which will only add to your overall debt. Just make sure that you don’t skip a payment because you have something important coming up.
Many people don’t realize that you can reduce your monthly payment by as much as 50% just by making sure that they are paid on time. One way to do this is to use automatic bill pay. There are some online companies that allow you to set up a pay schedule where your money goes out each month automatically. You will have to pay for the service but you won’t have to deal with those annoying creditors.
You might wonder what is a service fee if you are getting charged for a credit card statement or account maintenance. It is commonly called a statement fee and it is applied on top of what you would normally pay each month. It is usually less than half the amount of the regular monthly fee and is applied twice a year. So once you have added up all the fees, you might find that it is actually cheaper to pay the statement fee rather than paying the annual credit card costs.
Another type of credit card service charge is late payment charge. This is applied to your bill every month regardless of when you made the payment. This will stay on your credit card record for two years. Many people will try to avoid this charge by paying their bills on time. Unfortunately this will not prevent them from being charged again and often the companies find no other way to find out the person that defaulted.
Some credit card companies will charge what is a service fee every time you make a purchase. This is an unnecessary expense that can be avoided. Instead, find other ways to save money each month. The easiest way to do this is to pay your entire balance every month. Try to keep an extra account in your name in case you need it later.