Credit Cards 101: Top Eight Card Fees

by : Joseph Kenny



For new credit card users, the arrival of that first bill can contain some extra charges that you did not expect based upon that card offer you responded to online. There are often certain types of fees that will be included in billing cycles or in response to customer use (or misuse) - and many depend upon the card company. At the same time, there are some common card fees that may show up at some point through your use of the credit card. Therefore, it may be beneficial to review each of the eight typical card fees and explain what each one means for you, the cardholder.

Take a look at the following eight credit card fees:

Set-up fee - This is the one-time-only fee that a credit card company will charge you to establish a new credit account. The set-up fee is what you are charged for opening up a new credit card account.

Annual fee - This fee is essentially the amount that you will be charged for using your credit card each year or annually, hence the term annual fee. The annual fee may be processed on one of three different schedules: monthly, quarterly, or annually.

Cash advance fee - The cash advance fee is charged when the credit card is used to obtain a cash advance. More and more cards are offering this features since the convenience of the card with a cash feature is growing more apparent. The fee is processes one of two ways by most companies. The first way is by a flat rate while the second is based upon a percentage of the amount you received as a cash advance.

Balance-transfer fee - Balance-transfer fees are charged to your account when you are transmitting the balance of one credit card to another. (This might be done take balance from a higher interest card and place it on a lower interest card.) Balance transfers are processed in different ways depending upon the card company.

Late payment fee - Late payment fees are charged to credit card accounts when payments are not received on time. These types of fees can vary considerably from one card to another and it is worth finding out what a particular company charges versus another. Also, note that the type of credit card you have can determine the late payment fee.

Credit-limit-increase fee - If you want to up your card's credit limit you may be accessed a small credit-limit-increase fee.

Over-the-credit-limit fee - An over-the-credit-limit fee is penalizing fee for card users who make purchases that go above the established limit.

Return-item fee - These fees are also penalty fees because they involve compensation to the company for returned checks.

These are just the basic types of fees you will encounter over the course of your credit card use. There may be other charges or fees that your particular company includes in certain circumstance. One of the best things you can do is become aware of these fees and what causes them. Being aware of your card's terms and conditions can go a long way to keeping you out of trouble.