Credit card companies collected over $120 billion in fees from consumers in 2023, and a significant portion of that revenue comes from charges that are entirely avoidable. While some fees are tied to legitimate services, five specific credit card fees should never appear on your statement if you manage your accounts properly.
Late Payment Fees
The most common and costly fee is the late payment penalty, which now averages $41 per occurrence. The CFPB recently proposed capping these fees at $8, but until that rule takes effect, cardholders should set up automatic payments for at least the minimum amount due. Setting payment reminders three days before the due date provides an additional safety net.
Cash Advance Fees
Taking a cash advance from your credit card triggers an immediate fee of 3% to 5% of the transaction amount plus a higher APR that begins accruing interest the same day no grace period. A $500 cash advance could cost $25 upfront and accumulate interest at 25% or more. Use a debit card or a low-interest personal loan instead.
Foreign Transaction Fees
Many cards charge 1% to 3% on every purchase made outside the United States. Travelers who use a card without foreign transaction fees can save $30 to $60 on a typical international trip. Most travel rewards cards have eliminated this fee entirely.
Over-the-Limit and Returned Payment Fees
- Over-the-limit fees (up to $39) apply when a transaction pushes your balance above the credit limit; opt out of over-the-limit coverage to prevent these fees entirely
- Returned payment fees ($25–$35) hit when a check or electronic payment bounces; always verify sufficient funds before paying
- Annual fees for cards that do not offer benefits exceeding their cost should be renegotiated or the card downgraded
The CFPB credit card resources and Investopedia's fee breakdown provide in-depth guidance. Refuse to pay these five fees and keep more of your money where it belongs.
