Credit cards can have various charges and fees associated with their use. The specific charges can vary depending on the credit card issuer, type of card, and the terms and conditions of the card agreement. Here are some common charges you may encounter with credit cards:
Annual Fee
Some credit cards charge an annual fee for the privilege of using the card. The amount of the annual fee can vary widely, ranging from no annual fee to several hundred dollars for premium cards. It’s important to consider the benefits and features of the card in relation to the annual fee before applying.
Interest Charges
If you carry a balance on your credit card from month to month, you will be charged interest on the outstanding amount. The interest rate is typically expressed as an annual percentage rate (APR). It’s important to understand the APR and any promotional or introductory rates offered by the card issuer.
Late Payment Fee
If you fail to make at least the minimum payment by the due date, a late payment fee will be charged. The late payment fee can vary, but it is typically a fixed amount.
Over-Limit Fee
If you exceed your credit limit, some credit cards may charge an over-limit fee. However, the Credit Card Act of 2009 in the United States requires cardholders to opt-in to over-limit fees, meaning the issuer cannot charge the fee unless the cardholder specifically agrees to it.
Cash Advance Fee
If you use your credit card to obtain cash from an ATM or for cash-like transactions, such as gambling or buying foreign currency, a cash advance fee is typically charged. Additionally, interest on cash advances may be higher than the standard purchase APR and may start accruing immediately.
Foreign Transaction Fee
When you make a purchase in a foreign currency or outside of your home country, some credit cards charge a foreign transaction fee. This fee is usually a percentage of the transaction amount and can apply to both purchases and cash advances.
Balance Transfer Fee
If you transfer a balance from one credit card to another, a balance transfer fee may be charged. This fee is typically a percentage of the transferred balance.
Returned Payment Fee
If a payment you make on your credit card is returned or fails to clear, a returned payment fee may be charged.
