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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.)

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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.

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