All credit cards have fees. In fact, the key to becoming a savvy credit card user lies in understanding what they are and how to avoid them.
To help get you started on the right path, here are the most common credit card fees every cardholder should know and understand.
1.) Annual Fee
This fee is charged to your credit card each year for the convenience of having the card. And while they can sometimes be more than $400, the vast majority of annual fees are under $100.
Don't be surprised if you receive notice from your credit issuer that your favorite no annual fee credit card will soon move to an annual fee structure. These fees seem to be making a strong comeback since the CARD Act of 2009 was passed.
Of course, that doesn't mean you have to just give in and pay up. Be sure to give your credit card company a call and ask them to waive the fee. And when you do, don't forget to tout your years of loyalty and all the "other" places you could easily take your business.
2.) Balance Transfer Fee
If you want to transfer an existing balance to your credit card, you're most likely going to pay a balance transfer fee. Currently ranging between 1-5 percent of the total amount transferred, these fees are a one-time charge per completed transfer.
However, not all cards are plagued with balance transfer fees. Check out the Capital One No Hassle Cash Rewards credit card for a good alternative
3.) Late Payment Fee
Pay your credit card bill late, or pay less than the minimum payment amount (or both at the same time), and you'll most certainly get slapped with a hefty late fee.
Often as high as $39, late payment fees are fairly easy to avoid by keeping the golden rule of credit cards—always pay your credit card bill in full and on time!
4.) Over-the-limit Fee
This fee could be as high as $39 and is levied when your balance exceeds your total credit limit.
The CARD Act of 2009 requires that credit issuers give you the right to opt-in to these fees now, so they can no longer charge you without your previous consent.
Instead, they would have to decline your purchase at the point of sale, which is actually a much better option for consumers. So remember to opt-out of opting-in and save yourself the headache of possibly dealing with over-the-limit fees.
5.) Return Check Fee
This fee is charged when your payment bounces. The amount varies, but it could also be as high as $39.
To avoid this, always make sure you've balanced your checking account and have enough money to pay your bill before you cut the check or hit the "submit payment" button.
6.) Foreign Transaction Fee
A foreign transaction fee, which is usually an additional charge of three percent, is applied to every purchase made overseas. If you travel a lot, then you should already be more than familiar with these fees. They can add up fast!
Save yourself some money the next time you travel and make sure you have a Capital One credit card in your wallet. They are one of the few credit issuers left that continue to offer no annual fee credit cards without foreign transaction fees.
7.) Minimum Finance Charge
You will be charged a minimum finance charge if you carry a balance on your credit card and the calculated amount of your finance charge is less than the minimum amount allowed. It's generally not a lot of money, but they're annoying fees nonetheless.
Avoid these little buggers by always paying your credit card balances in full and on time.
8.) Paper Statement Fee
It sounds absurd, but many credit issuers are starting to charge customers money to receive paper copies of their statements. Bank of America, for example, has begun charging $9 to certain customers for this service.
Save some trees and avoid this ridiculous fee by simply opting out of paper statements as soon as you open any credit card account.
9.) Setup Fee
If you've never had to use a secured credit card to rebuild your credit, then you've probably never heard of a setup fee. That's a good thing, because nobody wants to pay a one-time fee of up to $100 just so a credit issuer will setup their account! Unfortunately, if a secured credit card is the only type of card you can qualify for, enduring a setup fee might be a necessary expense in order to get some credit and start building a positive payment history again.
There are some credit cards for bad credit that offer $0 setup fees, so be sure to do your research before deciding which secured credit card is the right one for you.
