Credit & Debt

Hidden Credit-Card Fees

Nickel-and-dime charges can really add up. Here's how to avoid them.

If you think you have a no-fee credit card, think again. Even if your card doesn't levy an annual fee, the sponsor has probably loaded it with nickel-and-dime charges that can really add up. According to RK Hammer, a bank-card advisory firm, card issuers took in $13 billion in fees last year, not counting $12 billion in late fees. (Check out the best credit card deals.)

But there are some steps you can take to minimize nuisance fees. For example, never use your credit card to obtain a cash advance from an ATM. Card companies treat cash advances as loans. That means you'll pay a 3% fee on the amount you withdraw, with a $5 minimum, plus interest will start to accrue immediately. Interest rates on cash advances start at about 8% and may go as high as 24%.

Filling in so-called convenience checks, which are often included along with appealing low-rate balance-transfer offers, is strictly a no-no. Again, issuers treat these checks as cash advances, and you may incur a 3% fee, with a $5 to $10 minimum. Plus, you not only incur a fee when you use the check, but card issuers impose an average fee of $31 if the check is returned and a $26 fee if you stop payment on it. Likewise, using your credit card to buy a lottery ticket or a money order is considered a cash advance.

Swipe your card abroad and you are likely to find a 3% foreign-transaction fee on your statement -- 1% charged by Visa or MasterCard, and 2% by your credit-card issuer. Capital One is the only major issuer that doesn't impose a foreign-transaction fee. Some cards issued by credit unions pass on only the 1% fee imposed by Visa and MasterCard.

Paying your bill by phone just once could cost you $5 to $15. Need a duplicate copy of a statement? You might pay as much as $13. Lose your card and need a replacement in a hurry? Be ready to ante up $20.

See our tables with the best credit card deals.

Most Popular

13 States That Tax Social Security Benefits
social security

13 States That Tax Social Security Benefits

You may have dreamed of a tax-free retirement, but if you live in these 13 states, your Social Security benefits are subject to a state tax. That's on…
October 4, 2021
How Big of a Threat Does Inflation Pose to Your Retirement?
retirement

How Big of a Threat Does Inflation Pose to Your Retirement?

You might be surprised how much inflation can nibble away at your retirement nest egg over time if you aren’t prepared.
October 3, 2021
10 Best Stocks for Rising Interest Rates
stocks

10 Best Stocks for Rising Interest Rates

The 10-year Treasury yield is hovering near its highest level in months. Here are 10 of the best stocks to buy in a rising interest-rate environment.
September 30, 2021

Recommended

Should I Use Credit or Debit?
Basics

Should I Use Credit or Debit?

Credit cards offer more protections and rewards, but debit cards reduce the temptation to overspend.
October 4, 2021
New Buy Now, Pay Later Options
Smart Buying

New Buy Now, Pay Later Options

If you’ve been considering a BNPL plan, make sure the credit card in your wallet doesn't already have you covered.
September 29, 2021
Think Twice About Applying for Credit
Basics

Think Twice About Applying for Credit

Credit card issuers are offering a lot of incentives, but your credit score could suffer.
August 27, 2021
Credit Cards Offer Travel Insurance
Travel

Credit Cards Offer Travel Insurance

Premium rewards cards that may charge an annual fee generally provide better coverage.
August 26, 2021