by Kailey Hagen | Updated July 21, 2021 - First published on Jan. 18, 2020
Many or all of the products here are from our partners that pay us a commission. It’s how we make money. But our editorial integrity ensures our experts’ opinions aren’t influenced by compensation. Terms may apply to offers listed on this page.
Credit card companies set their own terms, but you get some influence over which ones apply to you.
Credit cards have their perks, but they also have their price. And that price can get very expensive if you run up a balance you can't pay back. Choosing the wrong credit card can also cost you in lost rewards and additional fees. The good news is, you can avoid many of these costs by choosing the right card and managing your money responsibly. Here are four credit card fees you don't have to pay.
Tips and tricks from the experts delivered straight to your inbox that could help you save thousands of dollars. Sign up now for free access to our Personal Finance Boot Camp.
By submitting your email address, you consent to us sending you money tips along with products and services that we think might interest you. You can unsubscribe at any time. Please read our Privacy Statement and Terms & Conditions.
There are so many rewards credit cards available today that don't charge an annual fee, you shouldn't pay for one unless you want to. In rare cases, it might be worth it -- for example, if you're paying for a premium travel credit card that offers free travel vouchers and free luggage. But you should always do the math first to calculate whether the rewards you'll earn outweigh the cost of the annual fee. If not, move on to a different card.
Read the fine print carefully when signing up for a new card. It may be that the annual fee is only free or discounted in the first year, but then a standard fee kicks in in the second year. Check the cardholder agreement to learn about the card's annual fees, including any promotional rates.
You may be able to negotiate a reduced annual fee with your card issuer, or even eliminate it completely. But card issuers don't have to agree. If you've had the card for a long time, you can use your loyalty as leverage and threaten to switch to a different credit card if they don't comply. Be prepared to make good on that threat if your card issuer denies your request.
You can incur foreign transaction fees when you use your credit card in a foreign country. This fee is often 3% of the transaction and you'll pay it every single time you use your credit card on your trip. It's possible to rack up quite a bit if you're not aware of these fees.
Most top travel rewards credit cards don't charge foreign transaction fees, so choose one of these cards if you're planning to travel abroad. Check the cardholder agreement on your existing credit cards if you're unsure about whether they have foreign transaction fees. Another option for getting around these fees is to rely primarily on cash while you're abroad. It's still a good idea to have a credit card for backup, though, in case there's an emergency or you run out of cash.
Everyone knows that if you don't run up a balance you can't pay back, you'll never pay a dime in credit card interest. However, that knowledge isn't especially useful if you already have credit card debt. In this case, you can still avoid interest payments temporarily -- and possibly forever -- if you use a balance transfer card.
These cards have 0% introductory APRs for six to 21 months. Pay off your balance within this timeframe and you won't need to pay any more interest. Balance transfers usually have a fee attached -- often a percentage of the balance you're transferring -- but this option will probably still be more affordable than continuing to deal with the interest you are paying right now.
If you cannot pay the full balance back within the introductory APR period, your remaining balance will begin accruing interest at the standard APR unless you transfer that remaining balance to another balance transfer card.
Late payments can hurt your credit, and they also come with late fees, which can make your balance more difficult to pay back. Your card issuer may charge you up to $28 for your first late payment and up to $39 for any additional late payments. But you can easily avoid these fees by always paying your credit card bill on time. Set up automatic payments, if possible, or set reminders for yourself so you remember to pay the bill by the due date.
The only things you should have to worry about paying for are the purchases you charge to your credit card. Read through the cardholder agreement before you sign up with a new credit card and make sure you understand all the associated costs. Then, choose and use your cards responsibly so you can avoid the four fees mentioned here.
If you have credit card debt, transferring it to this top balance transfer card secures you a 0% intro APR into 2023! Plus, you’ll pay no annual fee. Those are just a few reasons why our experts rate this card as a top pick to help get control of your debt. Read The Ascent's full review for free and apply in just 2 minutes.
We're firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers. The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.