5 Secret Credit Card Fees

David Sung | March 29, 2012

You’re at the cash register getting ready to complete your purchase when the cashier kindly asks you if you want to save 15% on your purchase by signing up for their credit card. Sound familiar? There are more than 576 million credit cards in circulation and counting. Retailers are making it easier to grab them with special incentives that attract eager consumers – especially college students.

Credit limits are determined largely by your credit score. The higher your score, the less risk you pose to default, and the more confident the banking institution is to lend you money. However, if you’re not careful, the fees associated with credit and debit cards can easily send you over your limit and devalue your credit standing. Here’s how to avoid some of the most common ones.

Fees for Your Fees

When you have to choose between paying your electric bill or your credit card, keeping your lights on will be your likely choice. Those hard choices come with penalties in the form of late fees – which you expect, to some degree. What you may not know is that if your late fee pushes you over your credit limit, another fee can be assessed. Late fees range between $15 and $39, and an over the limit fee depends on the issuer but, on average, is $40. Forget to pay again and the fees go up.

To avoid double fees, don’t wait until the last possible day to pay your bills. After you receive a paycheck, organize your bills by priority and take care of them as soon as possible.

Interest Rate Increases

If you have multiple credit cards, which many Americans do, be careful how you manage them. Many people pay credit card bills with other credit cards – a dangerous cycle to get wrapped up in. Your financial decisions are tied into your credit score. Creditors know this, and even if you pay them on time, they can still penalize you for paying another lender late. This penalty typically comes in the form of higher interest rates. Paying late signals creditors that the risk of lending to you is increasing. This can make it difficult to get approval down the road.

When you get your credit statement, at least pay the minimum to give yourself some flexibility.

Getting Charged when You Never even Charged

Let’s say you signed up for a card at a retail store that was having a great sale, and the additional 15% off was too tempting to pass up. If this store isn’t a place that you frequent, that card can end up being a drain on your finances.

Cardholders who don’t use their cards after a year can incur an inactivity fee of $50 to $100. Banks can refund this amount once you charge a certain amount back on that card. If you know you’re getting a card for a specific purchase, and you don’t intend to shop their regularly, pay off the amount and cancel the contract. It’s one less fee to worry about, and your wallet gets lighter in a good way.

Going Green

If you ever needed a reason to go green, let fees be it. More companies are cutting costs by turning to paperless billing systems. If you’d rather have hard copies of your bills, companies are more than willing to pass the expense on to you. While this processing fee is nominal, it’s easily avoidable. Sign up for e-statements instead, save money, and help save the environment at the same time. It’s a win-win situation.

Foreign Travel Fees

We all need more time to travel, but before you set off on your dream vacation, check with your bank. Lenders will assess fees for the convenience of having access to your account while traveling. The Credit CARD Act requires credit card companies to disclose how much they charge for foreign transaction fees, also known as currency conversion charges. Some banks have dropped this fee as a perk for certain cards, but check to make sure your card qualifies. American Express charges the highest rate at 2.7% with each foreign transaction. This chart is an easy guide to what you can expect before swiping your card abroad.

When you’re excited about the additional 15% savings, it’s easy to ignore the fine print about fees. Remember these five tips before signing on the dotted line.  

More Articles

Four Tips to Make Securing Loan Approval Quickly and Easily

Stressing about applying for a loan? Here are some tips and tricks to prepare yourself for applying and make securing instant loan approval easy.

Read More >

What Does a Financial Advisor Do and Why Do You Need One?

What does a financial advisor do? Learn more about these essential financial professionals and how they can help you improve your short and long term financial situation.

Read More >

Separating Check Cashing Myths from Reality

Check cashing gets a bad rap, largely due to media portrayals & cliches. This blog dives into separating check cashing myths from reality to give you a more accurate picture.

Read More >

Trusted provider of cash loans since 1996


Connect With Us

Loan Amount is subject to loan approval. Loan terms and availability may vary by location.  Approval rate based on complete applications received across all Cash Store locations. Customers can typically expect to receive loan proceeds in less than 20 minutes; however, processing times may vary. Loans / Advances are provided based on approved credit. Each applicant for credit is evaluated for creditworthiness. Vehicle is subject to evaluation for title/auto equity loans.

Please see the Licenses and Rates page for additional product details.

Cottonwood Financial offers consumer credit products that are generally short-term in nature and not intended for long-term borrowing needs.

In Texas, Cash Store is a Credit Services Organization and Credit Access Business. Loans are provided by a non-affiliated third-party lender. Please see the Licenses and Rates page for links to Consumer Disclosures and choose the one for the product and amount that most closely relates to your loan request.

Customer Portal residency restrictions apply. Availability of funds may vary by financial institution.