Fri. Nov 27th, 2020

Credit card fees Almost inevitable – every card has something. However, a better understanding of these fees can help you choose the right credit card for your needs and save money.

The 2019 US News Consumer Credit Card Fee Study analyzed the fees of hundreds of credit cards active in the US News Card database, identifying average annual percentage rates, annual fees and late and transactional fees.

  • About 70 percent of credit cards do not charge an annual fee.
  • Of the cards charged annually, the average fee is about $ 110.
  • The average APR is between 17 and 24 percent.
  • The average maximum late fee is about $ 36.
  • Twenty-six percent cards typically charge a 3 to 5 percent balance transfer fee, and the minimum fee is $ 5 to $ 10.
  • About 40 percent of cards waive foreign transaction fees.

Annual Fee

Roughly two-thirds do not charge cards or 68 percent annual fees, but for those who do, the average annual fee is about $ 110. Some types of cards, including travel and secured cards, usually have an annual fee, but other types, including low APR, balance transfer, student and cash back cards, often have no annual fee. Sometimes, cards that charge an annual fee waive it for the first year, especially among travel cards.

Beverly Harjog, a credit card expert and consumer finance analyst for US News, says, “When you are matching your spending patterns to a reward credit card, in some cases you can actually earn more with that card.” Which is an annual fee. “If the fee is not waived for the first year, ask your issuer if it will be possible.”

card type Average annual fee (including no charge card) Average annual fee (only cards that charge) Card percentage with no annual fee Percentage of cards that charge an annual fee but waive it for the first year
balance transfer $ 26.49 $ 125.34 79 percent 14 percent
Cash back $ 11.49 $ 80.46 86 percent 6 percent
Low APR $ 21.28 $ 88.14 76 percent 17 percent
Award $ 41.38 $ 125.81 67 percent 15 percent
Safe $ 22.43 $ 34.89 Is 36 percent 7 percent
student $ 0 $ 0 100 percent N / A
journey $ 93.17 $ 139.16 34 percent 34 percent
All cards $ 35.23 $ 109.63 68 percent 13 percent

April

On average, a credit card has a APR between 16.75 and 23.62 percent. However, some card types have APRs that may fall outside that range. Low APR cards have an average APR of 12.06 percent, which is much lower than the average APR of all cards. And award cards have an average maximum APR of 24.25 percent, slightly higher than the average maximum APR of all cards.

card type Average Minimum APR Average max apr
balance transfer 15.46 percent 23.76 percent
Cash back 16.06 percent 23.94 percent
Low APR 12.06 percent 19.34 percent
Award 16.89 percent 24.25 percent
Safe 19.34 percent 19.87 percent
student 16.89 percent 25.18 percent
journey 16.95 percent 24.16 percent
All cards 16.75 percent 23.62 percent

Late fees and fines

Consumer credit card late fees are limited by law. A credit card company may charge a $ 28 late fee on the first delay. The fee can be up to $ 39 if it lies a second time within the next six billing cycles. Some cards charge up to this limit, but others do not charge the full $ 39 late fee, even if you are late. You can find cards that waive your first late fee, or all late fees, but automatically lower late fees: only about a dozen cards in the US News Study provide this feature.

If your payment is refunded due to insufficient funds, you can expect to pay an average maximum payment amount of approximately $ 34. This charge is above any applicable late fees if insufficient funds delay your payment for that statement period.

a Penalty apr This can be triggered if your credit card payment is delayed by at least 60 days and your issuer sends you a written notice of a rate increase at least 45 days before the effective date. The average penalty APR for all cards in the US News study is 27.54 percent.

Student cards have the highest average late fees and penalty APRs and the second-highest maximum payment fees. Bringing money for these fees can be difficult for students who do not have low income. But these fees can pose some risk to issuers, who typically offer this type of card to students with limited credit histories.

card type Average maximum late fee Average maximum return paid fee Average penalty apr
balance transfer $ 36.34 $ 33.72 28.4 percent
Cash back $ 36.36 $ 34.24 26.42 percent
Low APR $ 37.05 $ 32.81 26.71 percent
Award $ 36.85 $ 34.34 27.63 percent
Safe $ 34.39 $ 31.70 22 percent
student $ 37.83 $ 34.43 Is 29.99 percent
journey $ 37.36 $ 34.65 28.57 percent
All cards $ 36.34 $ 34.01 27.54 percent

Balance transfer fees

Some credit cards allow you to do balance transfers and may offer a zero percent introductory APR on balance transfers. However, you will usually be charged a balance transfer fee. About three-quarters of cards, or 72 percent, that transfer offers charge a 3 percent balance transfer fee. Generally, there is a minimum balance transfer fee of $ 5 to $ 10.

Card percentage without balance transfer fee Percentage of cards with an exempt balance transfer fee during an introductory period The percentage of the card that charges a 3 percent balance transfer fee The percentage of cards that charge a 4 percent balance transfer fee The percentage of the card that charges a 5 percent balance transfer
4 percent 1 percent 72 percent 7 percent 16 percent

Cash Advance Fee

Credit cards charge a cash advance when you use your card to withdraw cash from an ATM or a convenience check from a card issuer. The cash advance fee is 2 to 8 percent, and the minimum fee is usually $ 5 to $ 10. Typically, you can expect to pay a 2 to 5 percent cash advance fee, but some cards do not have a cash advance fee.

Card percentage without cash advance fee Card percentage that charges 2 to 4 percent cash advance Card percentage that charges 5 percent cash advance Card percentage that charges 8 percent cash advance
4 percent 54 percent Is 39 percent 3 percent

Foreign transaction fee

When you shop in a foreign currency or country, your credit card may charge a transaction, which is usually up to 3 percent. About 50 percent of all cards are charged at 3 percent. Some cards, about 12 percent, charge a foreign transaction fee of less than 3 percent. Most cards with foreign transaction fees charge a minimum fee of $ 5 to $ 10. About 40 percent of all cards and about 50 percent of travel cards waive foreign transaction fees.

Card percentage without any foreign transaction fees Percentage of cards with foreign transaction fees of 0.8 to 2.7 percent Percentage of card with 3 percent foreign transaction fee
Is 39 percent 12 percent 49 percent

Which card type has the highest fees?

There is not a single card type that has the highest fees across the board. That said, travel cards have higher average annual fees and payment fees than other types of cards. Student cards have late fees and penalty APRs and second cards have average average minimum APRs compared to other cards.

All cards balance transfer Cash back Low APR Award Safe student journey
Average annual fee $ 35.23 $ 26.49 $ 11.49 $ 21.28 $ 41.38 $ 22.43 $ 0 $ 93.17
Average Minimum APR 16.75 percent 15.46 percent 16.06 percent 12.06 percent 16.89 percent 19.34 percent 16.89 percent 16.95 percent
Average late fee $ 36.34 $ 36.34 $ 36.36 $ 37.05 $ 36.85 $ 34.39 $ 37.83 $ 37.36
Average return paid fee $ 34.01 $ 33.72 $ 34.24 $ 32.81 $ 34.34 $ 31.70 $ 34.43 $ 34.65
Average penalty apr 27.54 percent 28.40 percent 26.42 percent 26.71 percent 27.63 percent 22 percent Is 29.99 percent 28.57 percent

Credit card fee limit

Ideally, you want to get the most value from your credit card. Although you must factor in rewards and cardholder benefits, the simplest way to increase the value of your card is to reduce or eliminate as many unnecessary credit card fees as possible. You can do this by taking these steps:

  • Compare card fees.
  • View card types with low fees.
  • Ask for a lower fee.
  • Weigh the value of transaction fees.
  • Avoid late fees.

Compare card fees. When you choose a new credit card, compare its fees with the other cards you are considering. If you plan to keep a balance, compare the minimum and maximum APR available for the card. If the card has an annual fee, consider whether the value of rewards and benefits will offset the cost.

“If you take a minute, don’t get angry and look at what you get for a fee, in many cases, it’s worth it,” John Ulzheimer, a credit specialist who has worked at FICO and Equifax Huh. “An annual fee should not automatically disqualify a card option.” She stands, he gets what she gets in return.

View card types with low fees. For example, cash back and student cards often have little or no annual fees. Lower APR cards are designed to offer possibly the lowest rates, but this means that they do not offer stronger rewards or cardholder benefits than other cards.

Ask for a lower fee. With a new card, you can expect standard annual fees, late fees and other fees advertised by the card issuer. You will be assigned a variable APR based on your credit. But if you already have a card, you may be able to negotiate better fees and rates than now. The issuer can transfer your account to a different card product with a lower fee, reduce your APR or waive late fees, but you have to ask.

“It can often be worth calling your credit card issuer to see if you can waive fees comparatively or for a short period of time,” says Matt Schulz, chief industry analyst at ComparisonShards.com. “The credit card marketplace is very competitive, your chances of success are probably higher than you realize.”

Weigh the value of transaction fees. Using a card with a foreign transaction fee for purchase that will apply the fee is usually not a good idea because there are so many cards available without a fee. If you are planning an international trip, get a card that waives this fee.

“There are a lot of cards out there that give you travel rewards and those things that travelers are often looking at without including foreign transaction fees,” says Schulze. “Traveling abroad without paying a 2 to 3 percent fee is quite expensive.”

Cash advance fees are also not a good idea and should be avoided if possible. This type of transaction not only has a fee, but also has a higher APR than regular purchases. Cash advances also do not have a grace period, such as regular purchases, which means that you will start paying interest as soon as you make a transaction.

However, balance transfer fees can usually offer savings if you are moving your loan to a card that offers a zero percent balance transfer introductory APR.

“If you are transferring interest-acquired debt to a card that has no interest for some time, then a balance transfer fee might be worth it from a financial standpoint,” says Ulzheimer. “If you’re going to save $ 1,500 in interest, but you have to pay the $ 200 balance transfer fee, then you won the math.”

Avoid late fees. Almost all credit cards charge late, and although you can do your best to avoid paying late, for complications and mistakes, even the responsible card holders. Plan ahead so that you can reduce your risk of late fees. This means setting up automatic payments and reminders so that you make at least the minimum payment every month. Also, make sure that you have sufficient funds in your bank account so that you can avoid paying back.

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