5 Credit Card Fees You Should Know About

We break down the fine print.

Credit cards can be confusing. And if you’ve ever looked at a card’s terms and conditions, the fine print further complicates things — if you even read it.

While you may be familiar with the fees your card charges, chances are you may not know as much as you think. For example, did you know that you still have to pay a credit card’s annual fee – even if you don’t use it?

Here are five credit card fees you should know about.

Annual Fees

Probably the most well-known credit card fee, annual fees are charged once per year to keep a credit card account open and active. Not every credit card has an annual fee, but a large number of cards, especially ones that earn significant rewards, do.

While you may want to avoid annual fees altogether, it may be worthwhile to pay it, depending on the card. For example, a card with an annual fee will often offer a higher intro bonus and better ongoing rewards compared to a card with no annual fee.

Worth noting: Annual fees are not associated with the use of the card. This means if you have a credit card with an annual fee, you will be charged the fee regardless of whether or not the card was used. Similarly, a number of credit cards offer $0 intro annual fees, which means new cardholders won’t pay an annual fee for the first year, but will every year after.

Balance Transfer Fees

If you’ve ever looked into a balance transfer credit card, you’ve likely seen something about a balance transfer fee. This fee (usually 3 to 5 percent of the transfer or a set dollar amount, whichever is greater) is charged when a balance is transferred from one credit card to another.

For example, let’s say you transfer $1,000 to a card that charges a balance transfer fee of 3 percent or $10, whichever is greater. Then, you’ll pay a $30 (3 percent) balance transfer fee because it’s greater than the $10 flat fee.

Some credit cards charge no balance transfer fee. But, generally speaking, if the one-time balance transfer fee is lower than the ongoing interest you’d pay on your current credit card, then the balance transfer is worth it.

Late Payment Fees

As you likely guessed, when you pay your bill late, you will almost always be charged a fee — usually ranging from $25 to $35, depending on the card.

On top of paying a fee, making a late payment has other consequences. It typically hurts your credit: Payment history makes up 35 percent of your credit scores. You could also lose any rewards you’ve earned during that billing cycle.

Penalty APRs

When you pay your credit card late, you’ll not only be charged a late fee, as noted above, but you may also get hit with a penalty APR. (It’s technically not a fee, but important to keep in mind when dealing with credit.)

Depending on your card, a penalty APR can be a one-time fee or can replace your interest rate altogether for as long as six months – or indefinitely.

Cash Advance Fees

Essentially, a cash advance is a short-term loan that you take out against your credit line. When you complete a cash advance, you are charged a fee, which is usually a percentage of the cash advance (like 5 percent) or a set dollar amount (like $5), whichever is greater.

For example, if you take out a $150 cash advance on a card that charges a cash advance fee of 5 percent or $10, whichever is greater, you’ll owe $10 — because it’s greater than the 5 percent fee ($7.50).