While airline credit cards offer you the opportunity to earn air miles that can be redeemed for flights and may other rewards, each card carries a range of fees. The fees charged vary from provider to provider but they do exist, and could surprise you if you are not aware of what they are.
Annual Fees
This fee is charged by the credit card company and billed to your account. Some providers add the annual fee to your account in twelve monthly instalments. Annual fees can differ in value but when added to your account you would be charged interest on the balance. If you are looking for a new airline credit card look for one without an annual fee. This could save you in the long run as you would not have to pay this fee and the interest it incurs.
Balance Transfer Fee
At times it would become necessary for you to transfer outstanding credit onto a new airline credit card. When you transfer a balance you would most likely be charged a balance transfer fee which is added to the balance on your account. The amount of this fee is normally 3% or a minimum of $5 but this can vary across credit card providers.
Cash Advance Fee
This fee is charged to your account or deducted from the withdrawn cash amount depending on your card provider's policy. Withdrawing cash from your airline credit card can be quite expensive, especially if your provider does not offer a grace period for cash withdrawals. Without a grace period on cash withdrawals you would incur interest right away.
Over Limit Fee
If you exceed your credit card limit you would have to pay the over limit fee. The cost of this would be dependant on the balance owing in your credit card account. Some airline credit cards charge $15 for balances up to $500 and $39 on balances over $500. Based on this amount it would be much better if you stayed within your limit to avoid unnecessary fees.
Late Fees
As the name implies this fee is added to your account when you pay your bill after the due date. Once in your account you would be charged interest on the figure. The fee can vary but a typical fee is charged at $15 for balances up to $250 and $39 for balance above $250.
These fees can add up, but whether or not you incur them is up to you. To avoid having to pay any extra fees all you need to do is stay within your limit, use your credit card for purchases only and pay your bill on time.
When you apply for your airline credit card, or when you receive credit card leaflets with your monthly statement be sure to read what it states. Often there is a clause that states the credit card provider can alter the fees at anytime. You would need to be aware if and when this occurs so that you can budget wisely.
