Top Tips to Avoid Most Common Credit Card Fees

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By: Aquib Nawab


1 - Pay your bill on time

Late fees typically range from $25-40 per late payment. Set up automatic payments or calendar reminders to pay at least the minimum by the due date every month. This ensures you never miss a payment and avoid unnecessary late fees.

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2 - Pay more than the minimum due

Paying only the minimum keeps your balance high and leads to more interest charges over time. Try to pay 2-3 times the minimum or a fixed amount like $50 or $100 above the minimum each month. This will help you pay off the balance faster and reduce interest fees.

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3 - Avoid cash advances

Cash advance fees are usually around 3-5% of the amount advanced. Many cards charge interest immediately on cash advances too. Use your credit card only for purchases, not for withdrawing cash. Resist the temptation to get cash advances even in emergencies.

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4 - Don't go over your credit limit

Exceeding your credit limit results in an overlimit fee typically around $35. Know your limit at all times and be cautious of pending charges that haven't hit your account yet. Stay well under your limit to ensure you never go over.

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5 - Say no to premium cards

Cards like airline miles, hotel points and other reward cards often have high annual fees ranging from $50 up to several hundred dollars. Consider a no-annual-fee rewards card or use a basic card with no extra perks to avoid annual fees.

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6 - Watch out for balance transfer fees

Moving debt from one card to a new card often costs 3-5% of the balance transferred. Do the math to make sure the fee is less than the interest you'll save with an intro 0% APR on the new card.

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7 - Decline currency conversion

Paying in a foreign currency adds international transaction fees of around 3% typically. Use a credit card with no foreign transaction fees when traveling internationally to avoid this.

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8 - Understand cash back rewards

Some cash back cards require you earn a minimum amount (e.g. $25) before you can redeem rewards. Know the minimums and make sure you can actually use the cash back you earn.

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