Credit Card Fees

Fees, fees, fees. Credit card companies love them. You hate them. But maybe you would like fees better if you got to know them.

Here is a list of common credit card fees, as compiled by the Federal Reserve Board, with a little more information about what they are, what they’re for, and some other tidbits of note.  

• Annual fee – This is your standard, once-yearly fee that the credit card company charges you to use their card and pay them monthly bills. Sometimes it is billed monthly in smaller payments rather than in one lump sum. Some credit cards do not charge an annual fee, although those can carry a higher interest rate.
• Late-payment fee – We all know this one. Avoid it by paying your bill by the due date.  Stop to pet a dog on the way to the post office and you could be hit. The average late fee is $34.09
• Cash advance fee –When you take out a cash loan on your credit card, known as a cash advance, a charge usually goes on your account. Typically, this charge can be a flat fee or a percentage of the dollar amount of the advance.  Often, a cash advance has no grace period, and you begin paying interest on it immediately.
• Balance-transfer fee. Charged when you transfer a balance from another credit card to your card.
• Over-the-limit fee – This fee kicks in when the when your balance exceeds your credit limit. Credit card companies have slashed credit limits recently, sometimes reducing the limit beneath the standing balance. That practice can mean over-the-limit fees, on average $36.53, being charged to your account. 
• Credit-limit-increase fee – If you ask for an increase in your credit limit, it can cost you this fee.
• Set-up fee – This fee is your welcome wagon from the card issuer – a fee to set up your account.  
• Return-item fee – If your payment check bounces, this gets stuck onto your bill.
• Other fees – Some other less common fees include a fee for paying by telephone, credit bureau reporting, reviewing the account, or other client services.

Do you love them now? No, I can’t say I love them, either. But know that the deeper you get into credit card debt, the more likely you will see some or all of these fees. Know that they will be part of your life as long as you swipe the plastic money.