Credit Card Fees and How to Save on Them
6 Min Read | Last updated: January 7, 2025
This article contains general information and is not intended to provide information that is specific to American Express products and services. Similar products and services offered by different companies will have different features and you should always read about product details before acquiring any financial product.
Credit card fees may include annual fees, cash advance fees, late fees, and more. Learn about common credit card fees and how to save on them.
At-A-Glance
- If you have a credit card, you may have encountered different fees.
- Credit card fees may not always be a bad thing. For example, you may find an annual fee reasonable given the card’s benefits.
- It pays to find out which fees you may be charged before getting a new credit card.
Fees can add to the cost of a wide range of products and services, including credit cards. Being informed can help you be smart when it comes to credit card fees, helping you to save on some fees and plan for others.
10 Common Credit Card Fees
There may be a number of different credit card fees, and they can vary, depending on your credit card and in some cases, how you use it. Here’s a look at ten common credit card fees and charges:
1. The Annual Fee
Some credit cards charge an annual fee. Annual fees vary considerably, depending on the card in question. Higher annual fees may correlate to more substantial card benefits. For example, a fee for a specialized travel card may grant you access to airline lounges or include travel credits.
How to save on annual fees:
You could opt for a credit card with no annual fee. However, keep in mind that an annual fee may not always be a bad thing. For many card holders, the cost of the annual fee may be more than offset by the features and benefits that their card offers.
2. Balance Transfer Fee
Some cards may charge a balance transfer fee when you move debt from one card to another. You may pay 3% to 5% of the amount you transfer.1 That means if you consolidate $10,000 to the new card via a balance transfer, you can expect to pay a $300 to $500 balance transfer fee.
How to save on balance transfer fees:
It may be a good practice to weigh the cost of the fee against the benefits. Transferring your high-interest balances to a balance transfer credit card with a 0% introductory Annual Percentage Rate (APR), for example, could make a balance transfer fee worth paying.
3. Foreign Transaction Fee
Another credit card fee you may want to be mindful of is the foreign transaction fee. This fee varies but usually ranges between 1% and 3% of your purchases.2 It may be charged by some credit card issuers when you use the card outside the U.S. The fee may even apply if you are in the U.S. but purchase something from outside the country.
How to save on foreign transaction fees:
One way to save on paying foreign transaction fees is to shop for a no foreign transaction fee credit card.
4. Interest Charges
With most credit cards, interest charges may occur when you carry a balance from month to month. But you can also be charged interest for certain types of transactions, such as balance transfers and cash advances.
How to save on interest charges:
If you’re planning to carry a balance, note that the amount you may be charged can depend on your card’s APR and your balance. Another way to avoid purchase interest is by opting for a card with a 0% introductory APR. With these cards, you may want to make sure you make at least the minimum payment on time each month. Note that if you don’t pay the balance off at the end of the introductory period, you may owe interest on the balance.
5. Additional Card Fee
If you authorize someone else to use your credit card account, you may have to pay an annual fee to get the extra card. Note that this fee can vary depending on your credit card issuer.
How to save on additional card fees:
Check with your credit card issuer first to see whether there is a fee for adding an additional user.
6. Credit Limit Increase Fee
Some cards may charge a fee if you apply and are approved for a higher credit limit. You can check your card’s terms and conditions before requesting a credit limit increase.
How to save on credit limit increase fees:
If you’re considering a credit limit increase, you may want to check with your credit card issuer first to see whether there could be a fee.
7. Over-Limit Fee
If you spend over your credit limit, you may be charged an over-limit fee. This fee can vary, depending on your card issuer.
How to save on over-limit fees:
You may have to opt in to have your over-limit transactions approved. If you don’t opt in, then your card issuer can just decline any purchases that you try to make that are over your limit.
8. Setup and Maintenance Fee
Some cards may charge fees to set up the account and another fee to maintain it. These fees may be tied to secured credit cards.
How to save on setup and maintenance fees:
Consider opting for a card that may not charge setup and maintenance fees. Alternatively, check with your card issuer to see how much these fees will cost.
9. Late Payment Fee
Card issuers can charge a fee if you make a late payment. In some cases, a late payment could result in a higher interest rate as well.
How to save on late payment fees:
You can avoid late fees by setting up autopay on your account, and double checking each month to ensure that the payment has gone through.
10. Cash Advance Fee
A fee for a cash advance applies if you use your credit card to withdraw cash. Certain transactions may be considered cash advances as well. Cash advance fees vary, but typically range from 3% to 5% of the amount.3 Auto loans, lottery tickets, and peer-to-peer payments are examples of transactions that may be considered cash advances.
How to save on cash advance fees:
You can avoid a cash advance fee by avoiding cash advances or transactions classified as cash advances, and instead opting for alternative forms of payment.
The Takeaway
Learning about the different types of credit card fees can help you to save on them or plan for them, and keep your costs associated with using your credit card down.
1 “What Is a Balance Transfer Fee?,” Experian
2 “What Is a Foreign Transaction Fee?,” Experian
3 “What Is a Cash Advance Fee on a Credit Card?,” Experian
Allan Halcrow is a freelance writer concentrating in business, human resources, and diversity and inclusion. He is also the author of four books on management.
All Credit Intel content is written by freelance authors and commissioned and paid for by American Express.
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