What Fees Can You Expect With a Credit Card?

If such a thing as a fee-free credit card exists, we haven’t seen it. While you may be able to avoid paying some of the most common credit card fees, the fact remains that credit cards come with fees. It’s one of the ways credit card companies make money. Here are some of the fees you can expect when you apply for a credit card.

Annual Fee

An annual fee is a yearly charge you pay just for having your credit card. Many credit cards that come with annual fees have some other type of benefit, like a great rewards program. Other annual fee credit cards are aimed at people with bad credit history. Some credit card companies waive the annual fee for customers who charge a certain amount each year.

Late Fee

The easiest way to avoid a late fee is to make your credit card payment on time each month. You’ll be charged this fee anytime your minimum payment isn’t received by 5 pm the date your payment is due. Late fees can’t exceed your minimum payment or $25, whichever is higher, unless you’ve been late another time within the past six months. In that case, the maximum late fee is $35.

Credit Limit Fee

If you go over your credit limit, you can be charged a fee. Before your credit card issuer can assess this fee, you must have opted-in to having over-the-limit transactions processed. Your over-the-limit fee can’t exceed the amount you went over the limit and you can’t be charged for the same over-the-limit instance more than two consecutive billing cycles.

Expedited Payment Fee

Generally, credit card issuers can’t charge a fee for making a credit card payment. The exception is when you need a customer service representative to put the payment through faster so you won’t incur a late fee.

Foreign Transaction Fee

If you use your credit card internationally, you’ll be charged a currency conversion fee. Be careful, some credit card issuers even charge this fee when you make a local purchase from a foreign vendor. For example, if you purchase plane tickets from an airline outside the United States, you’ll be charged a foreign transaction fee even though you made the purchase from your home.

Cash Advance Fee

The cash advance fee is charged when you take out a cash advance against your credit limit. Cash advance fees are typically a percentage of the total cash advance, but there may be a minimum cash advance fee.

Balance Transfer Fee

Similar to a cash advance fee, the balance transfer fee is charged when you transfer a balance from another credit card. There may be a flat fee or the fee could be a percentage of the balance transferred.

Finance Charge

After making a purchase, you have a certain amount of time to pay the balance and avoid paying interest. That period of time is known as the grace period. If you don’t pay your balance before the end of the grace period you’ll be charged a finance charge. The finance charge is based on your interest rate and credit card balance.