Credit card companies charge various fees for credit card usage. These fees
are important for the consumer as they increase the ownership costs of the
credit card. Knowing these important fees types will help a consumer choose the
right credit card in a better way. The most important fees associated with
credit cards are:
1. Annual fees
Fees charged by credit card companies to use the credit card. This fees is
charge on an annual basis and is charged just for keeping the credit card.
Example an annual fee of 45$ per year.
2. Late Payment fee
When a credit card holder is not able to repay his monthly balance on time a
late payment fee is charged. This fee is not charged if you repay even the
monthly minimum, but if you miss an installment get ready to pay the late
payment fees. Example: Based on your balance on the late fee posting date - $15
if $100 or less; $29 if between $100.01 and $250; $39 if over $250.
3. Over-the-credit-limit fee
Every credit card issued has a credit limit associated with it. If you draw
more than your credit limit from your credit card over the limit credit fee is
charged. Example :Based on your balance as of the day the fee is assessed - $15
if $500 or less; $29 if between $500.01 and $1000; $39 if over $1000.
4. Cash Advance fee
When you take out cash advance with your credit card a cash advance fee is
charged. This is generally a percentage of the amount taken as cash advance. The
credit card company can also fix a minimum amount of sum that will be charged
with every cash advance. Example: 3% min $10.00
5. Balance Transfer Fee
When a credit card holder transfers his balances from one credit card to
another this balance transfer fees is charged by the credit card company. This
fees is generally a percentage of the amount for which balance transfer is
desired. The credit card companies can fix a certain amount as the minimum fees
for balance transfer. Example 3% (min $10)