A Guide to the Types of Credit Card Fees

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 a range 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 – especially if you can easily avoid paying some types of credit card fees.

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. A lower annual fee may get you only a basic credit card, whereas the highest credit card fees typically bring substantial perks. A fee for a specialized travel card, 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 cost worthwhile.

The most common credit card fees are those charged for the typical ways people may use their cards, including:

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 to the new card via a balance transfer, 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: For a cash advance, you'll usually end up paying a cash advance fee minimum, such as $10. Or you may end up paying a percentage of the cash advance amount, like 5%. This could vary, depending on the card issuer's policy and the amount of cash you end up withdrawing. For example, you may be charged either the percentage or the fee minimum depending on which is greater. Most cards also charge higher interest on cash advances than on purchases, and you may incur ATM fees as well. Plus, while you can generally avoid paying interest on purchases by paying your statement balance in full by the due date, you’ll begin to accrue interest on a cash advance immediately. Unless you’re facing a true emergency, cash advances can usually be avoided.

 
Foreign transaction fee: Another credit card fee you’ll want to be mindful of is the foreign transaction fee. This fee – which varies but usually ranges between 1% and 5% of your purchase, 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 (CARD) Act¹ 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. 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.