What Fees Your Credit Card Conceals
Credit cards may be fraught with a dozen of different fees. Certainly, you may know what annual fee is, but if you are not used to thoroughly read card agreements, you probably have never paid attention to some other kinds of fees. Still, it is very important to be well-informed about all the fees that your card comes with since ignorance can play a trick on you. So, let’s figure out the basic credit card fees:
- Annual Fee
As the name suggests, this fee is charged once a year just for keeping a card active. It is typical for many credit cards and can vary from $0 to several hundred. As a rule, the more benefits and perks the card offers, the higher the fee. Sometimes this fee may be broken down by months. This means that instead of paying the full amount at once you will need to make small equal payments every month. Also, in some cases, issuers waive the annual fee for the first year. But if you want to save more, look for credit cards with no annual fee.
- Activation Processing Fee
An activation fee is typically presupposed on credit cards for bad credit. If you find it indicated in the card terms, it means that banks may take money from you for the creation of a new account.
- Late Payment Fee
You may face a late payment fee in case you don’t make at least a minimum payment before the stated due date. Most credit cards have fees for late payments. However, in some cases, they may forgive your very first late payments or make it lower than subsequent ones.
- Returned Payment Fee
The name of this fee speaks for itself as well. It applies when the bank returns the card payment you have made. It often happens when it is not enough money on the bank account. This fee can reach $40. Therefore, always try to check the amount in your account before paying your credit card.
- Cash Advance Fee
A cash advance fee is charged when you withdraw cash from your credit card. For example, with the help of an ATM. The fee is a percentage of the transaction amount, which may be rather big. That’s why it is recommended to use this option only in the most extreme cases.
- Foreign Transaction Fee
A foreign transaction fee is charged for purchases made abroad or in a foreign currency. Note that even staying inside the U.S. but making payments in a currency different from the U.S. dollar, you may be charged the fee. Usually, it is 3% of the transaction. Fortunately, some credit card issuers charge no foreign transaction fees.
- Balance Transfer Fee
This kind of fee applies only to cards that allow balance transfers. Typically, it equals 3% or 5% of the transferred balance. Thus, the more you transfer, the bigger the fee. Of course it is possible to find a credit card with no balance transfer fee, but such a card is a rare case and most often comes with a huge APR on balance transfers.
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