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A Guide to the Types of Credit Card Fees

Discover 14 different types of credit card fees, from annual fees, to foreign transaction fees, to less popular fees such as credit limit increase fees. 

By Allan Halcrow | American Express Credit Intel Freelance Contributor

6 Min Read | October 1, 2021 in Cards

 

At-A-Glance

If you have a credit card, you may be subject to as many as 14 different fees.

Fees are not necessarily a bad thing. You may find a fee reasonable in return for the perks it brings.

It pays to find out which fees you may be charged before getting a new card.

Often buried in the fine print, fees can add to the cost you pay for a wide range of products and services – including credit cards. In addition to interest and finance charges, as a card member you might be subject to as many as 14 different types of credit card fees, depending on your provider. Some of these credit card fees are common and others less so – but they all can add up.

 
That doesn’t mean credit card fees are all bad. Many people decide that some fees are well worth the benefits they get for paying them. But it pays to be a smart consumer and find out what you may be charged before you get a new credit card – especially if you can easily avoid paying some types of credit cards fees.

 

Best-Known Credit Card Fee Is the Annual Fee

Some, though not all, credit cards charge an annual fee to have the card. Annual credit card fees start at about $25 but can rise to nearly $700 – for elite travel cards, for example. Still, credit cards are not created equal. The $25 fee may get you only a basic credit card, whereas the highest types of credit card fees typically bring substantial perks. The travel card fee, for example, may grant you access to airline lounges or include travel credits. Even though it’s relatively easy to find cards with no annual fee, it’s a good idea to do the math to decide whether the rewards offered make the fee worthwhile.

 

Fees Related to How You Use Your Card

The most common credit card fees are those charged for the most typical ways people may use their cards. Let’s look at some common credit card fees that relate to how you use your card:


Balance transfer fee: Some cards may charge a balance transfer fee when you move debt from one card to another. Typically, you’ll pay 3% to 5% of the amount you transfer. That means if you consolidate $10,000, you can expect to pay a $300 to $500 balance transfer fee. But just as with an annual fee, it’s a good practice to weigh the cost of the fee against the benefits. Transferring your balances to a 0% intro APR balance transfer credit card, for example, may save you enough in interest charges that paying the fee makes good sense.


Cash advance fee: If you use your credit card to get cash, you’ll usually pay a cash advance fee of 2% to 5% of what you withdraw – but that’s not all. Most cards also charge higher interest on cash advances than on purchases, and you may incur ATM fees as well. Unless you’re facing a true emergency, cash advance fees can usually be avoided.

 
Foreign transaction fee: Another credit card fee you can avoid is the foreign transaction fee. This fee – as much as 3% of your purchase in U.S. dollars – is charged by some credit cards when you use the card outside the U.S. The fee may even apply if you are in the U.S. but purchase something from outside the country. Unlike annual fees, there’s no potential upside to this fee. In most cases, a surefire way to avoid paying it is to shop for a no foreign transaction fee credit card. Travel rewards cards often fit the bill.


Overlimit fee: This is one fee you really shouldn’t encounter, for several reasons. For one, some card issuers – American Express included – have eliminated overlimit fees. But the 2009 Credit Card Accountability, Responsibility and Disclosure Act (CARD Act)1 allows card issuers to charge you a maximum fee of $29 if you make a purchase that pushes your credit card balance over your credit limit. If you’ve had a late payment within the previous six months, they can increase the fee to $40. But the CARD Act prohibits creditors from charging the fee unless you opt in for over-limit coverage. To avoid the fee, don’t opt in – or don’t exceed your credit limit.

 
There are also some fees related to your card use that are far less common:

  • Additional card fee: If you authorize someone else to use your credit card account, you may have to pay an annual fee to get the extra card.
  • Credit limit increase fee: Some cards charge a fee if you apply and are approved for a higher credit limit.
  • Express card delivery fee: Lose your card? Some card issuers charge a fee for faster delivery of your replacement card.
  • Additional statement copy fee: Some credit cards will levy a fee if you request duplicate documents, such as proof of a sales transaction or a paper statement.
  • Reward-related fees: While many rewards cards allow you to redeem rewards at no charge, others charge a fee, particularly if you have to speak with an agent to do so.
  • Setup and maintenance fees: Some cards charge fees to set up the account and another fee, typically monthly, to maintain it. These fees are usually tied to secured credit cards or to other cards designed for people with poor credit histories.

 

Fees Related to How You Pay Your Credit Card

Also lurking in the fine print of your card member agreement are some fees that have to do with how you pay your card bill. Here are the three to watch for:


Late payment fees: Card issuers can charge a fee if you make a late payment. But as with the overlimit fee, the CARD Act protects you. Late fees can’t exceed your required minimum payment or $29 – $40 if it’s your second late payment in six months – whichever is lower.


Returned check fees: Card issuers can charge a fee if your payment is returned by your bank. Again, the returned check fee can’t exceed your required minimum payment or the same $29/$40 as the late payment fee, whichever is lower. And you can’t be charged both a late payment fee and a returned payment fee for the same incident.

 
Expedited payment fee: If you run out of time to make a standard payment on your account, you can sometimes make an expedited payment by speaking with a customer representative. If you have that option, you may pay a fee for the privilege – but it may still cost less than a late fee.

 

The Takeaway

Card members may be subject to as many as 14 different types of credit card fees. If you aren’t careful, these fees can drive up the cost of having and using a credit card. But some of them may actually prove to be a good value – and there are ways to avoid paying most types of credit card fees.

Allan Halcrow

Allan Halcrow is a freelance writer concentrating in business, human resources, and diversity and inclusion. He is also the author of four books on management.

 

All Credit Intel content is written by freelance authors and commissioned and paid for by American Express. 

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