Hidden credit card fees guide

Credit card fees allow issuers to cover the expenses of making credit cards available to the public, that is, there is no such thing as a “free lunch.”

One way to pay for all the features you receive with your credit card having the merchant foot the bill by paying for the cost of running credit checks, going after deadbeats, dealing with customers who do not want the hassle of using cash, and the like.

The alternative method of supporting their operations is to charge users annual fees, or premium service fees, which are paid for as needed. Users should read the terms and conditions of credit card agreement carefully to understand the cost of certain services, which generally not applicable to everyone.

The charges for credit card fees vary widely per granting financial institution depending on their relationship with the card holder. Let the buyer beware.

Some fees pay for may include:

• Annual fee
  Customers may desire luxury services such as VIP lounges or bonus rewards
• Balance transfer fees
  Transferring balances almost always result in an upfront cost, generally a minimum of 2%, but usually 3% to 4% and up of the amount transferred.
• Card replacement fee
  Banks may charge to replace a physical card, whether lost, stolen, damaged, expired, etc.
• Cash advance fee
  In addition to higher interest rates, card issuers may charge an upfront cash advance fee. Credit unions and such shine in that respect by not having one. Read the fine print because often convenience checks deposited into checking accounts are billed as cash advances, rather than balance transfers.
• Copying fee
  Financial institutions will charge customers for physical copies of past statements, transactions or other hard-copy items necessary for billing disputes and/or other private or legal uses.
• Foreign transaction fee (currency conversion)
  Making purchases in countries that don’t use dollars is a hassle since there is work involved to figure out what a dollar is worth in local currency. There is always a loss in converting dollars to something else, but credit card companies usually card a 3% fee or thereabouts in addition to what you lose to exchanging dollars.
• Late payment fee – Some banks wait a few days before assessing a late fee, but many impose it the day after the payment was due. Issuers either charge a flat fee, such as $10, or a percentage of the balance due. Avoid late fees by using a card’s alert service (if available) or paying off your credit bill immediately on making your purchase.
• Lost card replacement fees? If your card has been lost or stolen more than once and you need a new one, some companies will charge you for a replacement. These fees are range from $5 to $10.
• Over-credit-limit fees – Most cards assess a fee if you charge more than your credit limit. These fees are charged each time you go over your limit, so you could be hit with several of them during the same billing period. Banks typically charge $10 or $15 for this fee or up to 5 percent of the amount you’re over your limit. These fees are in addition to interest charges.
• PIN replacement fee
  In case you have a PIN (personal identification number) for cash advances or other needs, the issuer may bill you for assistance in getting a new PIN.
• Returned payment fee
  Paying your bill on a checking account with insufficient funds will cost you, but enrich the banks. Either settle your credit card purchases immediately or pay via another method, such as online or in-store.
• Special application fee
  Services such as expedited processing and delivery may incur charges from the card issuer.