Credit Card Fees, and What to Do About Them

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Nobody likes service fees. Late fees or high interest rates from credit cards just throw your hard-earned money away. During the pandemic, some credit card companies were waiving fees. But is that still the case?

Relief from these excessive fees may only be a phone call away. All it takes is nerve and a polite demeanor. But how do you eliminate fees or at least reduce them?

Types of Credit Card Fees

When opening a credit card, it’s essential to read the fine print and understand the fees you may be charged. Even if the credit card gives you great rewards, they can be eaten up if you constantly pay fees. There are eight common credit card fees.

• Annual fees—Many credit card companies charge an annual fee for doing business with them. This can range anywhere from $95 to $500 yearly. Although some waive the fee the first year you’re with them, you'll be charged yearly after that.
• Late payment fees—When your credit card payment is late, you incur a charge. This could be anywhere from $29 to $40. The cost goes up for violations made within six billing cycles.
• Foreign transaction fee—Any purchases made outside the United States cost an additional fee. This fee is per transaction and is usually 3 percent of the purchase. If you make several purchases with your credit card, the fees can add up fast.
• Interest charges—If you don’t pay off the charges monthly, you'll be charged an interest rate on the balance. The amount of interest is your annual percentage rate (APR). It is listed on your cardholder agreement.
• Balance transfer fee—Every time you transfer your credit card’s debt to another card, you incur a fee. It will usually run between 3–5 percent per transfer. There is a $5–10 minimum charge.
• Over-the-limit fee—If you exceed the limit on your credit card, you'll be charged an over-the-limit fee. But you must opt-in for the credit card to allow you to go over the limit for this to happen. If you don’t opt-in, the credit card will just be declined, and no fee will apply.
• Returned payment fee—If you don’t have enough money in the bank and you try to pay your credit card, the payment will be returned. At this point, the credit card company will levy a fee against you.
• Cash advance fee—You will be charged a three to five percent fee if you receive cash in advance on your card.

Check the fine print before you sign up for a credit card so that you understand what fees will be charged. Also, read your credit card statement. It will also have this information. In some cases, the late fee may be a penalty APR. This means the interest on your credit card will increase.

Is a Credit Card Fee Waiver Possible?

Many credit card companies will waive fees if asked. They do this as a courtesy to customers with good payment records. But even if you ask, there’s no guarantee that the credit card company will comply.

How to Eliminate Credit Card Fees

If you’re worried about a late fee, check to see if the fee is on your statement. You might have a better chance of waiving it if it’s only been a day or two and not on your statement. That’s because the fee hasn’t been charged to your account yet.