Credit Card Fees

(6 of 9)

Credit Card Fees

For the privilege of buying things on credit, you may be required to pay fees; most fees occur when you do something you shouldn’t do, like make a late payment. Here are the most common fees:

• Cash advance fees. These are charged when you take cash out of your credit card.
• Convenience check fees. These are charged when you fill out the convenience checks that are sometimes mailed to you. These checks are essentially cash advances.
• Overlimit fees. These are charged when you spend more than your credit limit allows. Recent legislation has now made overlimit fees optional.
• Payment processing fees. These fees are for certain actions such as making payments over the phone and making stop-payment requests.
• Foreign currency fees. These are charged if you make a purchase or cash advance in a foreign currency.
• Membership fees. These fees are charged monthly or yearly simply for having the credit card. Yearly fees are also called annual fees.
• Late fees. These are charged when your monthly payment arrives late. They are also charged if your payment arrives on time but does not meet the minimum payment amount.
• Balance transfer fees. These fees are charged when you transfer a balance from one credit card to another. The receiving credit card is the one that charges the fee, which is usually a certain percentage of the amount transferred.

Fees are charged in a variety of different ways. Though they occur only once per incident, they are not all posted in the same way. For example, cash advance fees are posted to your balance in the billing cycle in which they occur. Membership fees are posted when you open your account and again whenever your membership is renewed (yearly or monthly).

Modern ways to keep tabs on your credit card activity

Those who are not as conscientious about their credit cards as they would like to be might benefit from signing up for automatic alerts. These are alerts sent via email or phone that tell you when a due date is approaching or what your current balance is. Check with your credit card company to see what types of alerts they offer. Another option that many find useful is automatic bill pay, in which your credit card company automatically pays your monthly bill from a bank account that you designate for it. Both automatic alerts and automatic bill pay can save you a lot of money in fees and stop damage to your credit report.