Common credit card fees

Summary

• Credit card fees are charges your card provider applies based on how you use your account.
• Some fees, such as annual or foreign transaction fees, could be avoided by choosing the right card or using certain features responsibly.
• Interest, late payment, and cash advance fees can add up quickly, but paying on time and in full each month helps you steer clear of them.
• Business credit cards typically include many of the same fees as consumer cards, plus processing costs for accepting payments.

Credit card fees — the charges your card provider sets for managing your account — often depend on how you use your card. Carrying a balance into the next billing cycle, missing a payment, or making certain transactions, like a balance transfer or cash advance, could all result in a fee.

The good news is that you can prevent many fees when you use your card responsibly. Let’s look at some of the most common credit card fees and simple ways to avoid them.

Consumer credit card fees

Knowing what triggers a fee can help you manage costs and get more value from your credit card. Here are nine of the most common fees consumers see.

Interest charges

You pay interest charges on a credit card when you carry a balance from one billing cycle to the next. Your rate is shown as an annual percentage rate (APR). That’s the yearly cost of borrowing based on the interest rate and certain fees.

APRs for purchases are usually around 20% to 25%, but the exact rate depends on your credit history, card type and current market conditions.¹

How to avoid interest charges

You could avoid interest charges by paying your balance in full each billing cycle — and the best way to do that is to use your credit card wisely. Try to reserve your card for purchases that fit comfortably within your budget.

Annual fees

An annual fee is a charge that card providers bill for the benefits and features that come with having a credit card. They’re most common on cards that offer rewards, travel perks or premium services.

How to avoid annual fees

The easiest way to avoid annual fees altogether is to select a card that doesn’t have one. You can also find credit cards that waive the fee for the first year.

However, annual fees aren’t always a drawback. If you regularly use your card, you may earn enough rewards to outweigh the cost. The key is to choose a card with benefits that align with your spending habits.

Foreign transaction fees

Some credit cards charge an additional fee, called a foreign transaction fee, for purchases made outside the U.S. They can apply any time a purchase is processed by a foreign bank or in a foreign currency, which means you could be charged if you shop online with a retailer based in another country.

How to avoid foreign transaction fees

Avoiding foreign transaction fees can be as simple as choosing a credit card that doesn’t charge them. Many travel and premium cards advertise no foreign transaction fees as a core benefit.

Bonus tip: If you frequently travel or shop internationally, look for a card that combines no foreign transaction fees with rewards for travel or global purchases.

Late fees

As the name suggests, credit card providers charge late fees when you pay your bill after its due date.

How to avoid late fees

Late fees aren’t going anywhere, so you want to create a system that makes it easier to pay on time. For example, you could:

• Set up automatic payments. Many card providers let you schedule recurring payments through your credit card account. If yours doesn’t, check with your bank. It may offer an automated bill payment service.
• Set calendar reminders. Adding a reminder to your personal calendar could help you stay on top of your credit card bill. You can decide how far in advance you want to pay your bill and have notifications sent to your phone or email.
• Change your payment date. If your current due date doesn’t line up with your paycheck, contact your provider to request a new statement date.

Cash advance fees

Most card providers charge a cash advance fee when you use your credit card to withdraw money from an ATM, bank branch, or through an internal transfer. Cash advances start accruing interest immediately, often at a higher APR than purchases, and they typically don’t offer a grace period.

How to avoid cash advance fees

People often get cash advances when they’re in a bind, but there are other ways to get money quickly. Some options include:

• Your savings. If you need cash right away, using your own funds is usually the most cost-effective option.
• Buy now, pay later (BNPL) plans. Some credit cards now offer BNPL plans that let you split a purchase into installments. Interest rates on BNPL purchases may be lower than for other transactions, and you may be able to avoid interest altogether if you make on-time payments.

Balance transfer fees

Transferring the balance of one credit card to another can be a smart way to consolidate debt and pay it off faster. However, you want to review your card’s balance transfer fee first.

How to avoid balance transfer fees

Promotional offers, like a low introductory APR, could help you avoid or reduce balance transfer fees for a limited time. Before you transfer any funds, be sure to:

• Check the terms. You may need to complete the transaction in a specific time frame to qualify for the promotional offer.
• Pay down your balance. Reducing the amount you transfer lowers the total fee.
• Compare savings carefully. Calculate whether the lower interest rate will save you more in interest than you’ll pay in fees.

Returned payment fees

A returned payment fee, also known as a returned check fee, is a charge your credit card provider applies if your payment doesn’t go through, which may occur if your bank account doesn’t have enough funds or if the payment information is incorrect. When this happens your bill remains unpaid, and you might face late fees or interest charges until the payment is successfully processed

How to avoid return payment fees

One of the easiest ways to prevent return payment fees is to set a reminder for your payment due date — even if you’ve set up automatic payments. That gives you time to check your balance and ensure you have sufficient funds available before your bank sends the payment.

Credit card surcharges

Credit card surcharges are extra fees some businesses add when you pay with a credit card instead of cash, debit or other payment methods. Surcharges are prohibited in a handful of states, but where they’re allowed, the law typically limits them to 2% to 3% of the total bill.²

How to avoid credit card surcharges

Not all businesses add surcharges, and those that do are required to clearly disclose them before you pay.² A quick glance at the register for notifications could help you avoid surcharges and keep more of your money where it belongs.

Business credit card fees

Business owners face many of the same credit card fees that consumers do, including:

• Interest charges
• Annual fees
• Foreign transaction fees
• Late fees
• Cash advance fees
• Balance transfer fees
• Returned payment fees

However, business cards aren’t covered by the same consumer protection laws that apply to personal cards, which means some fees may be higher. For example, business cards often have higher interest rates, so carrying a balance may lead to greater interest charges.³

Another difference is that business owners pay credit card processing fees. This fee consists of three charges: the interchange fee, assessment fee and payment processor fees. While these charges are unavoidable, understanding them could help business owners make informed decisions about which cards and payment systems work best for their business.

Interchange fees

An interchange fee is a charge that business owners pay to the cardmember’s bank every time a customer makes a purchase with a credit or debit card. The fee helps cover:

• Processing costs
• Fraud and security protections
• Rewards and benefits the card provider offers

Assessment fees

Credit card networks charge an assessment fee every time a transaction is processed. The fee is small — often around 0.13% to 0.15% — and while it’s paid by the bank, it usually gets passed on to the business owner.⁴ Assessment fees don’t appear on a customer receipt, but they’re part of the total cost businesses pay to accept credit cards.

Payment processor fees

Payment processor fees go to the company that handles the technical side of credit card transactions. That company, called a payment processor, connects all the other businesses involved:

• The cardmember’s bank
• The business owner’s bank
• The card network

Keep credit card fees from cutting into your budget.

Credit cards can be powerful tools for managing money — and understanding the fees that come with them helps you use them wisely. By knowing what triggers each charge and planning accordingly, you could avoid unnecessary costs, keep your account in good standing, and get more value from your card.

Sources

¹ WalletHub, “Average credit card interest rates,” https://wallethub.com/edu/cc/average-credit-card-interest-rate/50841, October 27, 2025, accessed October 29, 2025.

² 8am^TM LawPay, “Credit card surcharge laws by state explained for 2025,” https://www.lawpay.com/about/blog/credit-card-surcharge-rules/, October 24, 2025, accessed October 29, 2025.

³ Experian, “Pros and cons of business credit cards,” https://www.experian.com/blogs/ask-experian/pros-cons-business-credit-cards/, April 8, 2024, accessed October 29, 2025.

⁴ Forbes, “Credit card processing fees: The ultimate guide,” https://www.forbes.com/advisor/business/credit-card-processing-fees/, August 8, 2025, accessed October 29, 2025.