[Update: Some offers mentioned below have expired. You can view the current offers from our partners here — PenFed Promise Visa Card and Barclaycard Ring MasterCard. Disclosure: Cards from our partners are mentioned below.]
We all love the security and convenience of credit cards, but nobody likes paying fees. Most credit cards charge a variety of them, along with some penalties, yet nearly all of them can be avoided.
So, if you are looking to take advantage of using a credit card, while minimizing their costs, here are five credit card fees you can avoid and how to do it.
1. Annual Fees
There are a number of credit cards on the market that have annual fees, but you don’t always have to pay them. First, you can choose one of the numerous cards that don’t feature an annual fee (keeping in mind that those may have less generous rewards and benefits). Another strategy is to choose one of the cards that have annual fees that are waived for the first year. You can potentially cancel the card before paying the second year’s annual fee, if you feel that its rewards and benefits are not really worth it. And, before canceling any card because of its annual fee, you may want to contact the card issuer. In some cases, particularly if you use the card regularly and make all of your payments, they will waive the fee or offer rewards worth as much in order to retain your business.
2. Late Fees
Late fees are not really fees, they are penalties that are incurred when account holders fail to make the minimum payment on time. The easiest way to avoid the fees is to create a foolproof system for making on-time payments. For example, you can set up an automatic payments with your bank or issuer to ensure you meet your due dates. But, if you do have a late payment fee assessed, you should contact your card issuer and ask to have it waived as a one-time courtesy. Most issuers will do so for consumers whose accounts are and have been otherwise in good standing.
3. Foreign Transaction Fees
These fees are imposed by many cards on any transaction processed outside of the U.S. (So you can actually be charged these fees when doing business with a foreign company or when you are traveling to a foreign country.) Since an increasing number of credit cards no longer impose this fee, you can avoid the fee by picking one that skips the charge. Many of these are marketed towards travelers, but some card issuers such as Capital One, Discover, the Pentagon Federal Credit Union (PenFed), and the Navy Federal Credit Union don’t charge foreign transaction fees on any of their cards.
4. Balance Transfer Fees
When completing a balance transfer from one card to another, you are likely to be charged a balance transfer fee, which is typically 3% of the amount transferred. To avoid this fee, you can simply choose a card that doesn’t charge one. We recently ranked the best balance transfer credit cards in America — check it out.
5. Cash Advance Fee
Nearly all credit cards impose a cash advance fee when accessing money from an ATM. In addition, most cards will have a higher interest rate for cash advances. To avoid both the fee and the higher cash advance interest rate, don’t use your credit card in this way and to rely on a debit card for your cash instead. If you must use a credit card to access cash, there is one card that doesn’t have a cash advance fee, the PenFed Promise Visa Card. In addition, the Barclaycard Ring MasterCard charges a flat fee of just $3 for each cash advance while imposing the same interest rate for cash advances that it does for purchases.
Remember, it’s always a good idea to read the terms and conditions of any credit card you are considering so you understand what (and when) fees may be imposed before you apply for that particular product. You should also check your credit ahead of time to make sure you can handle another card or hard inquiry. (You can do so by pulling your credit reports for free each year at AnnualCreditReport.com and viewing your credit scores for free each month on Credit.com.)
At publishing time, the PenFed Promise Visa Card and Barclaycard Ring MasterCard are offered through Credit.com product pages, and Credit.com is compensated if our users apply and ultimately sign up for the cards. However, this relationship does not result in any preferential editorial treatment.
Note: It’s important to remember that interest rates, fees and terms for credit cards, loans and other financial products frequently change. As a result, rates, fees and terms for credit cards, loans and other financial products cited in these articles may have changed since the date of publication. Please be sure to verify current rates, fees and terms with credit card issuers, banks or other financial institutions directly.
More on Credit Cards:
- Credit.com’s Expert Credit Card Shopping Tips
- How to Get a Credit Card With Bad Credit
- An Expert Guide to Credit Cards With Rewards