Credit Cards: Fees

The most common fees credit card companies charge.

There seems to be a correlation between 'the number and amount of fees your credit card company will want to charge you' and 'how much the credit card company will find it 'desirable' to have you as a customer'. In other words, it is very likely that at least some of the charges will be smaller, if any, if you maintain an excellent credit history.

If your credit score is not outstanding, chances are you will have to bear higher fee costs until you

Annual Fee

Credit card companies charge a yearly fee for their services. The amount changes from company to company - as well as card to card. Annual fee is usually waived for customers who are considered 'desirable'. The recently increasing competition among credit card companies also keep annual fees low. A typical annual fee would be around $50. However, the range is from 0 to over $100.

Minimum Finance Charge

Some credit card companies charge minimum monthly finance fees if the amount is not paid in full at the end of the monthly term. However, there are some companies who charge their customers each month even if they pay their balances in full. The amount is usually less than $10.

Cash Advance Fees

This fee applies when the credit card account is used for cash advances. What the account holder should take into consideration before withdraw cash from an ATM machine is that a higher amount of interest will apply to such transactions. Besides, the grace period almost never is the case for cash advances - which means that the interest starts to apply from the moment cash is withdrawn. One other think to remember is that most credit card companies do not let account holders allocate their payments. In other words, your payments will first be deducted from your lower interest-bearing balances, which, in this case, are purchases made with the card.

Late Fees

This is the fee that applies when the account holder misses a due date. Late fees start from approximately $10, and can go over $50 -depending on the amount owed.

Overlimit Fee

Almost all credit cards have a limit, and if the account holder exceeds this credit line, most credit card companies apply an overlimit fee to the account. This fee is applied regardless of whether the card company authorized the charge - which means account holders should watch their balances and credit lines continuously in order not to be responsible for overlimit fees.

Transfer Fees

Credit card companies constantly offer current and prospective account holders to transfer their balances on cards issued by other companies to an account they provide with a lower interest rate. Although these offers, in some cases, can save the account holders some interest costs, they do not come free. The transfer amount is almost always subjected to a 3% fee. Transfer fees may have minimum and maximum amounts - which means that the fee can be no lower or no higher than the amounts the company provides in the terms of agreement.

Other Fees

Each terms of agreement is different from one another, and therefore you should go through everything before you want to make sure that there are no hidden fees of any kind. Credit card companies may impose a lot of rules that may increase your costs. One general advice may be that you just do not come close to any of the two limits: your credit line and your due date.