What comes with credit cards’ wide range of features and benefits are many different fees and charges. These can lead to serious debt when they add up quickly and leave unchecked.
Below are the most common credit card fees, and what can be done to minimise or stop their impact. By being aware, you can avoid most of these credit card fees.
A common credit card fee, annual fee ranges between $20 – $700 or more. Your credit card is likely to have a high annual fee if it offers some more features and benefits — like complimentary travel insurance or rewards programs.
Usually, annual fees start when a card is first activated. They are then charged on the same monthly statement for every year you have the card. Make sure to check the ongoing rates and fees before you apply as some cards waive this fee in the first year.
You should consider a card that offers a lower fee or one that charges no annual fee for life.
Interest is charged by credit cards when you carry a balance. You could have any or all of the following interest rates applied to your balance, depending on your card:
- Purchase rate — usually between 10% p.a. and 22% p.a. (variable), it’s charged for new purchases made on the card.
- Cash advance rate — usually between 19% p.a. and 22% p.a. (variable), it’s applied for cash advance transactions (ATM withdrawals or buying foreign currency).
- Balance transfer rate — can be as high as 22% p.a. (variable), it’s applied to any balance you have moved from an old card to the current one. It’s usually based on the card’s cash advance or purchase rate.
- Promotional interest rate — usually offered to new cardholders for a set period of time, like the 1st year.
Pay more than the minimum each month if you have a balance. Also, choose a card with a low ongoing interest rate or 0% promotional interest rate.
Late payment fees
A late payment fee, anywhere from $0 – $30, could be charged to you if you don’t pay by the due date on your credit card statement.
Some providers charge a late fee straight away. While others may not apply this fee, other penalties could, which may affect your credit history.
Consider the processing times for the payment method you choose. Make your payments before the due date on your statement or set up an automatic payment from your transaction account to meet this deadline.
Foreign transaction fees
When a credit card is used overseas or online with an international merchant, it applies a foreign transaction fee, a.k.a. currency conversion fee or international transaction fee. Usually, it’s between 1% and 3.5% of the total transaction.
There are credit cards that don’t apply a foreign transaction fee. Also, consider a prepaid travel card that can be loaded and used in different currencies, cash, traveller’s cheques, etc.Hidden Credit Card Fees To Look Out For Click To Tweet
Over limit fees
If you max out your credit card in a statement period, an over limit fee could be charged to you, anywhere from $5 – $35.
Not all credit card companies apply this charge.
Reward program fees
For choosing a particular rewards program, some rewards credit cards charge an annual fee, usually between $30 and $50. It applies on top of the card’s annual fee.
Credit card surcharges
Rather than your credit card provider, credit card surcharges could be charged by businesses — usually between 0.8% and 3% of the total transaction cost.
Some merchants (airlines) apply a flat fee, which could be higher.
Other credit card fees
These are less common credit card fees that may apply:
- Chargeback fee — it could be charged around $10 – $25 if there’s a need to reverse a credit card transaction through the credit card provider. Before going to your credit card provider, you can try to get a refund with the merchant.
- Card replacement fees — most credit card companies in Australia don’t charge a fee for a replacement card. Pay from $30 – $200 for fast-tracking or overseas replacements (damaged, lost, or stolen).
- Paper statement fee — usually around $5 – $10, this fee is charged if you request paper statements for your account. Avoid it with internet banking or with paperless statements sent to your email.
- Additional cardholder fee — usually around $5 – $35, there could be an annual fee if you request a supplementary or additional cardholder for your account.
- Non-bank ATM fee — there could be a charge of up to $5 if you use your credit card to withdraw cash or check your balance at an ATM outside your credit card provider’s network. Also, beware of additional charges from the ATM operator.
Microloans in Australia
If you’re feeling the dread of the costs of having a credit card, you may want to lighten your burden by applying for a microloan from Quickle.
By taking out Quickle’s microloans online, you can have quick cash used anyway you want. Only do this if you can truly afford to pay it back on time.
It’s quick and simple. Apply now!