The Ultimate Guide to Credit Cards

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Annual Fee

This is something that you will be charged every year just for using the card. The fee usually ranges from $25 to $250. In most cases, higher fees yield higher rewards and benefits, which help make up for the costs. If you rarely use a card that comes with a high annual fee, you’re just wasting money.

Late Fee

Most credit card companies will charge a late fee if you fail to pay your credit card payment on time. You may also incur this fee if you do not pay off the balance in full by a certain time, depending on the card you use. For most card issuers, the late fee is $10 to $20. If you make your payments on time every time, you can avoid this cost easily.

Overdraft Fee

This is a fee that is assessed if you make charges on your card beyond the credit limit, usually around $25. Most credit cards will have buffers on them to prevent you from doing this, but they don’t always work. If one of the merchants you work with takes a few days to process your charges, you might spend part of your balance that has already been spent. Watch your spending to avoid this fee and make sure it lines up with your available balance.

Bounce Fee

This is a fee that you will have to pay if your payment gets declined. Think of it like the fee your bank charges you for a bounced check. Under usual circumstances, this fee will be about $30.

Flexible Fees

Flexible fees change based on the amount of money you spend. They are based on a percentage of the transaction, not a specific price a card company sets. These costs aren’t the same from card to card, although they typically lie within the same range, and some of them change on a monthly basis. The following chart shows some of the most common flex fees you’ll find on your credit card and the average amount of each:

common flexible credit card fee bar graph