Credit cards can be a useful tool for securely paying for purchases and earning valuable perks. Fees, however, can quickly make your experience a losing proposition. Learn about each of the common credit card fees and why you should keep an eye out for them.
What are common credit card fees?
There are more than a dozen types of credit card fees that consumers may be charged in their lifetime. The following are the most common ones that affect today’s consumers.
Basic credit card account fees
Depending on your credit card account, you could find yourself being charged any of these basic account fees that have nothing to do with how you manage your account.
1: Application and processing fees
Did you know that some credit card issuers may charge you simply to apply for their card? While this isn't a widespread tactic, it does exist. Read the card application terms very carefully before hitting that "submit" button. If you're asked for your bank details upfront, you could be subject to this fee. This isn’t as common in the United States, but you’ll need to read the card agreement to see if the fee comes out of your bank upon application or gets added to your card balance upon approval (if approved.)
2: Account setup and program fees
Account setup fees may be charged the first time you open a secured credit card, and it will come off the amount of available credit you have to spend. Program fees vary and may be a few dollars per month to a larger annual amount. It’s possible to avoid these fees by not applying for cards that require them.
3: Annual fees
As an example, airline rewards credit cards, in particular, are known for their annual fees, which are used to offset the cost of perks like free companion airline tickets and complimentary checked bags. Some cards will waive the first year’s annual fee to get you to try their account, so just be sure to cancel before the renewal date if you’re not interested in maintaining a long-term relationship.