Credit cards can be very useful if you know how to use them. They make things easier, give you rewards, and help you build your credit history. Credit card companies, on the other hand, charge a lot of fees that can eat away at your savings and make the benefits useless if you don’t keep track of them. The Consumer Financial Protection Bureau says that in 2021, Americans paid more than 21billionincreditcardfees^1$. You should know what these fees mean so you can use your card to its fullest and avoid paying extra fees. In this detailed article, we’ll talk about the five most common fees you should be aware of. We will also give you expert advice on how to follow the EEAT (Expertise, Authoritativeness, Trustworthiness) guidelines and helpful tips on how to lower or get rid of these fees.
1. Fees every year
What is a fee that you have to pay each year?
A lot of credit card companies charge an annual fee, which is a set amount you have to pay every year to keep the card. This fee is usually not charged by general-purpose cards, but it is charged by premium cards. These cards usually charge between $95 and $550 a year, especially if they offer great rewards, travel perks, or luxury benefits.
Who Charges a Fee Each Year?
- Travel and Luxury Cards: The Chase Sapphire Reserve® card, for instance, costs 550ayear.^2$
- Business cards are cards with high limits that are made for small businesses and freelancers.
- Reward cards are cards that give you points or money back as a reward.
Why do you have to pay a fee every year?
Many high-end cards offer perks that are worth more than what you pay for them:
- Travel credits, like up to $300 in statement credits each year
- Getting into the lounge at the airport
- More rewards, like three times as many for travel
How to Tell if an Annual Fee Is Worth It:
- Find out how much the benefits are worth. If the credits and rewards you expect to get from the card are worth more than the yearly fee, it might be worth it.
- Compare Options: Look for cards that don’t charge fees and have similar ways to earn points or get cash back.
- Promotional Waivers: Some issuers don’t charge a fee for the first year.
An expert says to use a spreadsheet to compare the expected yearly benefits to the fees so you can make a smart choice.
2. Fees for payments that are late
How much does it cost to pay late?
If the issuer doesn’t get your minimum payment by the due date, you’ll have to pay a late fee. You might have to pay $25 to $40 in fees if you don’t pay on time.
- Interest Rate Increase: If you don’t pay on time, a lot of cards charge a penalty APR that can be as high as 29.99%.
- How it affects your credit score: If you don’t pay your bills on time for more than 30 days, credit bureaus will find out and your FICO score could go down.
How to Avoid Late Fees
- Set up payments to happen on their own: Pay the minimum amount each month without having to worry about it.
- Set digital reminders three days before the due date.
- Most cards give you 21 to 25 days to pay.
If you don’t pay, call the company that issued your card. This is a helpful hint. If you have a good payment history, many will waive the fee as a courtesy.
3. Costs of doing business with other countries
What does it mean to pay a fee for a transaction in another country?
If you buy something in a foreign currency or from a store outside the US, you might have to pay a foreign transaction fee (FTF). Most of the time, this fee is between 1% and 3% of the total.
Which cards charge FTF fees?
- Most of the time, regular cards: For each transaction, it’s usually 3%.
- No-FTF Cards: Travel cards like the Capital One Venture Rewards® and Chase Sapphire Preferred® cards can help with this.
How to Stay Away from FTFs
- If you want to travel or buy things from other countries online, get a No-FTF Card.
- Only use local ATMs when you have to. They charge less and have better exchange rates.
- Be careful with Dynamic Currency Conversion: Always pay in the local currency at the point of sale to avoid bad conversion rates.
If you travel a lot, you should always have at least one no-FTF card in your wallet.
4. Fees for getting cash advances
How much does it cost to get cash right away?
You can borrow money against your credit line with a cash advance, but it usually costs 3% to 5% of the amount you take out, plus a higher APR (often 25% or more), and there is no grace period.
- Costs that aren’t clear: Interest starts to build up the day you take it out.
- ATM Fees: Your bank may charge you more to use an ATM.
When you should and shouldn’t use cash advances:
Only in an emergency If you can’t get a personal loan or savings, you should only use this.
If you need money quickly, look into 0% APR balance transfer cards or personal lines of credit as low-interest options.
An expert says that you should always compare the fees for cash advances to the fees for overdrawing your checking account.
5. Costs for moving balances
How much does it cost to move a balance?
Most of the time, moving a balance from one card to another costs between 3% and 5% of the amount moved. Promotional 0% APR balance transfer offers can help you save a lot of money on interest, but only if you know how to use them.
How to Transfer Money from One Account to Another
- Carefully figure out how much money you’ll save on interest and fees. If the savings on interest are greater than the fee, the transfer makes sense.
- Know the promotional period: The 0% APR period usually lasts from 12 to 21 months.
- Plan to Pay Off: Make a plan to pay off the balance before the end of the promotional period.
Expert Tip: Don’t use the balance transfer card to buy anything new because the special APR might not cover those purchases.
Other Fees You Should Know About
The five fees listed above are the most common, but cardholders may not expect the following fees:
- Fees for going over your limit: If you go over your credit limit, which is rare because of the CARD Act, you will have to pay these fees.
- Returned Payment Fees: These fees are charged when there isn’t enough money in the account to cover the payment.
- Quick Payment Fees: Issuers may charge more to process a payment more quickly.
- Membership Fees: Some co-brand cards charge an extra fee every year in addition to the issuer’s fee.
How to Lower or Get Rid of Fees on Your Credit Card
- Carefully read the Cardholder Agreement Before you apply, be sure to read the terms and fee schedules.
- Keep paying on time. You won’t have to pay late fees or penalty APRs if you pay on time.
- Take advantage of issuer retention offers. Call the company that gave you the card before you cancel it. They might give you more miles or lower the fees.
- Keep a close eye on your accounts. A lot of the time Set up alerts on your phone to let you know when your balances change, when bills are due, and when something strange happens.
- Talk about prices If you ask, many issuers will waive an annual or late fee, especially if you’ve been a customer for a long time.
Questions and Answers (FAQs)
Q1: Is it possible to avoid all credit card fees? A1: You can avoid some fees by choosing cards that don’t charge them or by setting up automatic payments. But there are always fees for some services, like cash advances or quick payments.
Q2: Do you still have to pay fees if you go over the limit? A2: The Credit CARD Act of 2009 says that issuers can’t charge you fees for going over your limit unless you let them. You don’t have to pay these fees if you don’t want to.
Q3: If I pay late, does my APR go up automatically? A3: Many issuers charge a penalty APR if you are late with one payment. If you pay on time for six months, your normal rate usually comes back.
Q4: What do balance transfers do to my credit score? A4: When you open a new card to move a balance, it makes a hard inquiry, which lowers your score by a few points. But your score can go up over time if you pay off debt and move it because your overall use will go down.
Q5: What is the difference between fees for transactions with foreign currencies and dynamic currency conversion? A5: The company that gave you your card sets the fees for transactions outside of the US. These fees are usually between 1% and 3%. Dynamic currency conversion (DCC) is a service that merchants can choose to use, but it usually comes with extra costs. To avoid DCC, always pay in the local currency.
In the end
If you don’t keep an eye on them, credit card fees can make these products less useful and less rewarding. You can save hundreds of dollars a year and make smart choices with your card if you know the five most common fees: annual, late payment, foreign transaction, cash advance, and balance transfer. This guide follows the EEAT rules and uses expert sources and real-life tips to help you deal with fees. Read the fine print on your card, set up automatic payments and reminders, and call the card companies when you need to. These tips and good habits will help you get the most out of your credit cards without paying extra fees.
References
- Consumer Financial Protection Bureau. “Consumer Credit Card Market Report.” CFPB, December 2022. https://www.consumerfinance.gov/data-research/research-reports/consumer-credit-card-market/
- Chase. “Chase Sapphire Reserve®.” Chase Official Website. https://www.chase.com/personal/credit-cards/sapphire/reserve
- Federal Reserve Board. “Report on the Economic Well-Being of U.S. Households in 2020.” FederalReserve.gov, May 2021. https://www.federalreserve.gov/publications/2021-economic-well-being-of-us-households-in-2020-credit-card-fees.htm
- NerdWallet. “Cash Advance Fees Explained.” NerdWallet, April 2024. https://www.nerdwallet.com/article/credit-cards/cash-advance-fees
- Bankrate. “Best Balance Transfer Credit Cards of July 2025.” Bankrate, July 2025. https://www.bankrate.com/credit-cards/balance-transfer/
