A recent credit card study showed that the average credit card charges six separate fees. Fees are charged for things like withdrawing cash from an ATM, foreign transactions, and making late payments.
The study further reveals which cards have the most and fewest fees, with PenFed’s Promise Visa Card coming in with zero fees and winning the “Fewest Fees” category, and two cards from First Premier, the First Premier Bank Credit Card and the First Premier Bank Secured MasterCard, coming in as the most fee-laden cards, with 12 separate fees each.
One hundred different credit cards were included in the study, which was conducted in spring 2015.
Different types of fees
Credit card fees fall into two categories: transactional and penalty fees.
Penalty fees are easy to avoid, by simply abiding by the terms of your cardholder agreement. These are for things like making late payments and charging amounts that exceed your credit limit. While late payment fees were some of the most common fees charged to consumers, over-the-limit fees were rarer, possibly indicating that people are aware of their credit limit and refraining from excessive charging that would result in an over limit charge.
Transactional fees, for things like withdrawing cash from an ATM, getting a paper copy of your statement, and annual fees, are sometimes avoidable and sometimes not. Something like a foreign transaction fee may be seen as an unavoidable part of life if you’re traveling overseas and need to use your credit card. However, if you plan ahead and get a no-foreign transaction fee credit card designed especially for travelers, you can avoid paying this fee, which usually runs anywhere from 1% to 3% of your total transaction.
Not all fees are bad
An annual fee is something that some people prefer to avoid; however, paying an annual fee for a rewards credit card can be worth the money. Credit cards that offer high-value rewards and services like round-the-clock concierge service, purchase protection, trip insurance and car rental insurance can be worth many times their annual fee. Many rewards cards waive the annual fee for the first year and often offer valuable sign-up bonuses.
Cash advance fees second-most common
While annual fees were comparatively rare among the 100 cards in the study, all but two of the selected cards charged a fee for withdrawing cash from an ATM, making this fee the second-most common one. The most common fee was a late fee, charge by 99 of the 100 cards.