For many people, their credit card appears to be free. Apart from the interest they pay on their outstanding balance at the end of each month, they do not pay any other fees for the convenience of the credit card. While this may be true for some people, for many of them their credit card provider will in fact be charging them various fees. For others it may not be true at all as they have to pay a monthly or annual fee for their credit card.
Credit card fees can come from a variety of sources. The most basic is that the credit card company simply charges a monthly fee for the card. This can be a result of your having a particularly bad credit rating, but in fact, there are some very financially healthy people who pay these credit card fees. This is because some credit card providers charge these fees on their most exclusive and attractive cards, it is a payment that qualifying customers must make if they are to be granted access to the best rates and terms and conditions.
There are also fees for certain specific types of transactions. Some companies charge fees for using credit card checks. There is usually a fee for using your card abroad, especially if you use it to withdraw cash, and there are certain other types of transactions that will incur an extra fee depending on the policies of your specific card provider.
The most hated fees of all however, are the various fines and penalties that credit card companies impose on their customers for failing to fulfil certain conditions. If you are late on a payment, or do not meet the minimum payment level, you will be charged a fine from you credit card company. One thing you should be aware of with such fines is that once they have been levied on you, they cannot form the basis of future late payment fines. That means that if you do not pay the fine within one month, you cannot be fined again for this, so long as you have paid the minimum amount due on your bill.
With all these various charges, it may not be surprising to learn that credit card companies probably earn just as much money from the fees they charge for various services as they do from the interest they charge you on your monthly outstanding balance.
In the world of credit card usage, many cardholders can flounder in the bewildering mass of credit card fees that are tacked on to the monthly payment balance. Therefore, it may be appropriate to list the most common credit card fees that are accessed and explain what each one means for, you, the cardholder. Naturally, each one of these common fees is charged to the credit cardholder's account at certain times and often under certain constraints or circumstances, so their presence will vary from one user to another.
The eight most common credit card fees are listed below:
Annual fee. The credit card's annual fee is simply the amount that is charged to you, as the cardholder, for using the card each year. The fee may be accessed on a monthly, quarterly, or even on an annual basis.
Set-up fee. The set-up fee is what you are charged for opening up a new credit card account. It is a one-time fee.
Cash advance fee. This fee is charged to the cardholder's account when the card is used to process a cash advance (if the card has this feature included). The cash advance fee may be accessed either as a flat fee amount or as a percentage of the cash advance amount.
Balance-transfer fee. This is a fee that is charged to you, the cardholder, if you are transferring the due balance from one credit card to another. The balance transfer itself is carried out in different ways depending upon the terms that the credit card company has established for such services (if available). Regardless of the method, there is a small fee attached to every such balance transfer.
Late payment fee. This fee is fairly self-explanatory. You are charged a fee if your payment arrives after the invoice due date. Fees may vary widely between credit card types as well as card companies.
Credit-limit-increase fee. Many card companies charge a small fee when the cardholder requests an increase in his/her card's credit limit.
Over-the-credit-limit fee. This is a penalty fee that is accessed when you, the cardholder, make a purchase that goes above your current credit limit.
Return-item fee. This fee is accessed when a check sent for the payment of the credit card balance is returned due to insufficient funds.
Beyond these common fees, some cards may include other fees that can be charged to the cardholder's account under certain circumstances. For examples, there are fees for paying your credit card by telephone. Other fees include those charged to cover the costs of reporting to various credit bureaus, other customer services, and even to review your card account information.
It is important for you, as the cardholder, to read over your credit card agreement carefully so that you are aware of all of the associated fees that might be applied to your card's balance. Knowing what the common credit card fees will prepare you for when the bill arrives so that you are not left in the dark about a particular amount.
Peter Kenny has sinced written about articles on various topics from Credit Cards, Finances and Best Money Market. Peter Kenny is a writer for creditcards-gb For additional articles and an extensive resource for everything about credit cards, please visit us at