Understanding Credit Cards: Credit Card Fees

Credit and credit cards are an integral part of our economic system today. But there is a lot of misinformation and misunderstandings about credit. In this continuing series, we examine key concepts, tips and best practices when it comes to credit cards.

(11/8/2012)Many consumers have credit cards. But most don't fully understand their cards, and all the fees that credit card companies can and do charge.

What kind of fees do credit card owners need to be aware of?

    • Annual fee. This is a yearly fee charged for the convenience of having a credit card. Typical annual fees can vary from $25 to $300 a year, and may only be charged in the first year.

    • Application fee. Some credit cards charge a nominal fee to apply.

    • Cash advance fee. Some credit cards allow you to withdraw cash like a bank debit card, and simply add it to your balance to pay back. For this action, most cards charge a cash advance fee which is usually a few percentage points of the advance.

    • Balance transfer fee. Many credit cards allow you to transfer balances from other cards, often at low introductory interest rates. Cards can also charge a fee for the balance transfer, usually up to 3% of the amount.

    • Finance charge. If you carry a balance beyond the card's grace period, credit card companies will charge monthly interest. This finance charge will vary by card, and depend on the prime lending rate, the balance, and the company's method of calculating finance charges.

    • Late fee. Paying after the due date, or paying less than the minimum payment, can result in a late fee. Companies typically charge a flat late fee of $25 to $35, but may also subsequently raise your interest rate.

    • Over-the-limit fee. If you spend beyond the limit imposed by the credit card, you can incur a fee of up to $35.

    • Insufficient funds or returned check fee. If a payment towards your card is rejected by the bank for insufficient funds, you can be hit with a fee of up to $35.

    • Foreign transaction fee. If you use your card to make purchases in a foreign currency, whether shopping online or in another country, you may be charged a fee of 2-4% of the transaction.

    • Rewards fees. Some credit cards are associated with rewards programs, offering airline miles, gift cards, or a number of other options. While these are earned by purchases or transfers, they may not be entirely free. Some companies will charge up to $50 for cashing in rewards.

Credit card companies can recoup money through the myriad of fees listed here, and even more obscure fees that may be unique to the company. The best way to understand what you're being charged and when is to carefully review your credit card statement and user agreements.


For Additional Reading:

Understanding Credit Card Fees:
http://www.practicalecommerce.com/articles/2771-Understanding-Credit-Card-Fees-Part-1-The-Basics

Credit Card Processing Fees and Rates:
http://www.cardfellow.com/blog/credit-card-processing-fees/

 

 

 

Other related articles:

Understanding Credit Cards: Finance Charges Explained

Understanding Credit Cards: Choosing a Card

Understanding Credit Cards: Managing Interest

Understanding Credit Cards: How to Qualify for Credit Cards

Understanding Credit Cards: The Credit Bureaus

Maintaining credit health much like maintaining physical health

Understanding Credit Cards: Who Uses Credit Scores?

Understanding Credit Cards: The 5 Components of a Credit Score

Understanding Credit Cards: Checking Your Credit

Understanding Credit Cards: What is Credit?

Understanding Mortgages: What is a Credit Score?

 

 

Fannie Mae & Jumbo Mortgage Rates

Just One Click! = Current Rate Chart

Pennsylvania Mortgage Rates Current Mortgage Rates - Hawaii Current Mortgage Rates - Alaska West Virginia Mortgage Rates Virginia Mortgage Rates District of Columbia Mortgage Rates Maryland Mortgage Rates Delaware Mortgage Rates New Jersey Mortgage Rates Connecticut Mortgage Rates Rhode Island Mortgage Rates Massachusetts Mortgage Rates New Hampshire Mortgage Rates Vermont Mortgage Rates New Hampshire Mortgage Rates Maine Current Mortgage Rates Vermont Mortgage Rates Current Mortgage Rates - New York Current Mortgage Rates - Michigan Current Interest Rates - Wisconsin Current Mortgage Rates - MINNESOTA Ohio Mortgage Rates Current Mortgage Rates - Kentucky Current Mortgage Rates - Indiana Illinois - Current Mortgage Rates Current Mortgage Rates - Iowa Missouri Mortgage Rates Current Mortgage Rates - North Carolina South Carolina Mortgage Rates Current Mortgage Rates - Florida Current Mortgage Rates - Georgia Current Mortgage Rates - Tennessee Current Mortgage Rates - Alabama Current Mortgage Rates - Mississippi Current Mortgage Rates - Louisiana Current Mortgage Rates - Arkansas Current Mortgage Rates - Oklahoma Current Mortgage Rates - TEXAS Current Mortgage Rates - New Mexico Current Mortgage Rates - Arizona Current Mortgage Rates - Kansas Current Mortgage Rates - Nebraska Current Mortgage Rates - Colorado Current Mortgage Rates - Wyoming South Dakota Mortgage Rates Current Mortgage Rates - North Dakota Current Rates - Montana Idaho Current Rates Washington Mortgage Rates Current Mortgage Rates - Oregon Current Mortgage Rates - Utah Current Mortgage Rates - Nevada Current Mortgage Rates - California

Start by selecting your state