credit & debt

5 Vexing Credit Card Fees

No need to pay an annual fee for your rewards card. Check out the free options.

It’s annoying to get a great card offer in the mail and find, buried in the fine print, the disclosure that you’ll have to pay an annual fee of $50. Some superprime cards run a few hundred dollars a year, and the exclusive American Express Black card costs $2,500 annually plus a one-time initiation fee of $5,000.

The annual fee may be worth paying if the rewards outweigh the cost. Paying the Amex Black fee, for example, entitles you to a personal concierge and travel agent, plus companion tickets on international flights from selected airlines. If you are loyal to one airline and its branded card will help boost you to elite status, you may have another reason to pay the fee. Most rewards card issuers waive the fee for the first year, so you can reconsider after that. If you can afford a temporary ding to your credit score, cancel before your year is up. (But Curtis Arnold, founder of CardRatings.com, says watch out for fees to redeem your points for a ticket.)

You can find rewards cards without an annual fee. For example, most cash-back cards are fee-free -- shop around to find cards with the benefits you want (for suggestions, see 3 Rewards Credit Cards for Big Spenders.

Late-payment fee. If you’re even one day late with your payment, your card issuer can slap you with a late fee. Under federal law, late fees are capped at $35 and can’t exceed the minimum payment. If you have a good payment record -- especially if you have paid on time for an entire year -- call your card issuer and ask that the fee be waived.

Cash-advance fee. It’s tempting in a pinch to get cash with your credit card, but it’ll cost you. The fee is 3% to 5% of the amount you pull out or $10, whichever is greater, and the full amount starts accruing interest immediately. Also, the rate on cash advances is higher -- typically about 20% or more. Don’t take a cash advance unless it’s a true emergency.

Balance-transfer fee. There are a ton of 0% offers on balance transfers, but most of them trigger a fee of 3% to 5% of the amount you transfer. Some offers waive that fee (check out Chase Slate at Chase.com), but the best idea is to see how much interest you’d pay if you didn’t transfer the funds and compare it with the balance-transfer fee. If it makes sense to do the transfer, pay off your balance before the 0% rate expires.

Foreign-transaction fees. Anytime you travel outside the U.S. or buy from a foreign-based online retailer, you may be subject to foreign-transaction fees of 3% of the purchase amount. To avoid the charge, use any Capital One, Discover or PenFed card. Select travel cards from Chase and platinum cards from American Express also let you charge fee-free overseas.

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