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This article was last updated Oct 09, 2017, but some terms and conditions may have changed or are no longer available. For the most accurate and up to date information please consult the terms and conditions found on the issuer website.
Thanks to the implementation of the Card Act, fees and terms of credit cards are much easier to identify, making consumers more aware of what to expect while using their card. Want to learn more about some of the most common credit card fees? Here’s everything you ought to be aware of…
#1: Annual Fee– A once-a-year charge for owning the credit card. Not all cards have it, but most secured cards and subprime cards do, as do high-end “luxury” cards. Expect to pay anywhere from $20 to $300 depending on the card. If this fee sounds unreasonable, it often is. Avoid it by looking for a card without one, or call your credit card issuer and ask them to waive the fee. It happens more often than you think.
#2: Application Fee– The fee companies charge for setting up a new credit card. Those with poor credit are the ones who get stuck with it the most. This one-time fee ranges anywhere from $10 to $50 per application. If both you and your spouse apply for a joint credit card, you both have to pay a separate application fee. The good news is this fee cannot exceed 25% of your initial credit limit, and there are plenty of cards out there that do not charge this fee at all.
#3: Cash Advance Fee – A fee for withdrawing cash with your credit card. It is either a flat fee, such as $10 per every $100 dollars withdrawn, or a percentage, such as 4 per cent of the total amount. Any card with cash withdrawal charges this fee. Since it cannot be avoided, it is best to use it sparingly (or not use it at all!).
#4: Over-The-Limit Fee– A charge for going over your credit limit. For example, if you only have $900 left on your credit limit and you make a purchase for $910, you get the over-the-limit fee. The good news is that under the CARD Act companies cannot charge more than the amount spent. So if you go $20 over the limit, the charge cannot be higher than $20. The best way to avoid this fee is to not opt in the program that allows your card to exceed its credit limit.
#5: Balance Transfer Fee – A one-time charge for transferring your balance from one card to another. People often make transfers in the hopes of saving money by getting a better interest rate. However, the transfer fee can be as high as three percent, which only adds to your outstanding balance. Avoid this fee by not transferring unless you have a few thousand dollars in credit card debt and find a card with almost a zero-percent interest rate for a period of time that's long enough for you to pay the balance in full.
#6: Late Fee – A charge for not paying the bill on time. Credit card companies expect a minimum payment. Fail to pay it and you get stuck with a late fee in the next billing cycle. It can be as high as $35 depending on how many times you earned this penalty in the past. Avoid paying it altogether by always making the minimum payment on time.
#7: Returned Check Fee– A one-time fee for a bounced check. This often happens when customers try to pay off their credit card bill with the money in their bank account. If there isn't enough money in the account, the check bounces and the consumer is stuck paying the bill as well as a returned check fee. Depending on the card, the fee can go up to $35 dollars. It is an expensive mistake. Avoid it by making sure there is enough money in the bank before paying the bills.
#8: Foreign Transaction Fee- A charge applied whenyou make a purchase in a foreign country or a charge is made in foreign currency. It’s usually a percentage of the amount of the transaction, usually about 3 percent.
About the Author: Paula Pant writes for BillGuard, a service that protects you from "grey charges" — hidden fees, fine print tricks and other sneaky charges. Sign up for a free account to protect yourself from unwanted charges. Find them on Google+
Editorial Note: Any opinions, analyses, reviews or recommendations expressed in this article are those of the author’s alone, and have not been reviewed, approved or otherwise endorsed by any card issuer.
*The content in this article is accurate at the publishing date, and may be subject to changes per the card issuer.