Knowledge: your best defense
As a credit card holder, you need to know two things to protect yourself against hidden fees.
- The Credit Card Accountability, Responsibility, and Disclosure (CARD) Act of 2009. This act protects you against hidden and unreasonable fees. The CARD act eliminated some fees, reduced others, and made still others optional.
- The fine print on your credit cardholder agreement. Card companies are required to spell out all possible fees in the fine print of your cardholder agreement. Here, lack of knowledge is not protection against being charged, so it is important to read the fine print before choosing a new card (or renewing a current one).
10 Hidden credit card fees
Here are 10 of the most common "hidden" (aka "little known") card fees and what to do if you discover you have been assessed one of them.
1. Card replacement fee
Yup, your credit card company can charge you to replace a lost or stolen credit card.
- Average fee amount: $5 per card plus expedited shipping charges.
- What to do: You can call and ask for a waiver. Threatening to cancel your card is a good strategy here (since you don't have one to use, it’s a common time to cancel).
2. Reward redemption fee
The reward redemption fee is similar to the "convenience" or "service" charge you pay when you buy concert or sports tickets—if you use points or miles to book travel, you may be assessed a redemption fee.
- Average fee amount: varies by card.
- What to do: Your strategy for avoiding these fees varies by the fee. For phone booking "convenience" fees, use the online redemption option instead. For some fees, they are waived at higher membership levels or with an annual fee payment, so check if you are eligible.
3. Reward reactivation fee
The reactivation fee is assessed for one of two reasons: when you have become ineligible to redeem rewards due to late or non-payment of an outstanding balance, or when your rewards points are set to expire.
- Average fee amount: $25
- What to do: Knowing when accrued points expire can help you use them up before that date. Many cardholders just don't pay the reactivation fee if it is presented as optional (for instance, $5 to renew your points for another 12 months). If the fee is assessed to reactivate your account (which then includes your ability to use points) you want to cite the CARD act as this fee is now prohibited.
4. Foreign currency conversion fee
Also called a "foreign transaction fee," this fee tends to be a combination of the currency exchange rate (dollars to pounds, etc.) and a simple percentage-based transaction fee.
- Average fee amount: 3% of the transaction amount.
- What to do: This is no longer a popular fee for card companies, but many that waive this fee also charge an annual fee (which basically covers conversion fees and others). So if you are paying an annual fee, this can be a good point to use to negotiate a waiver. If you are not paying an annual fee, citing some of the newer competing cards that do not charge this fee may work to your advantage (for more see Time).
5. Over-the-limit fee
This fee is an opt-in only fee, but it’s easy to overlook the fact that you have opted in!
- Average fee amount: $25 – $35 per overage.
- What to do: You must opt out of this fee by calling or updating your preferences online. If you do not, the card company is legally permitted to charge you.
6. Returned payment fee
Sometimes called a "returned check fee" or "NSF" fee, this fee is assessed when you pay your credit card bill and your payment does not go through–for any reason.
- Average fee amount: $15 – $25 per transaction.
- What to do: Like overdraft protection plans, you must opt out of any formal plan your card company offers to avoid paying. Otherwise, your only recourse is to call and complain.
7. Expedited payment fee
This fee is assessed when you are nearly late to pay and want your payment to process immediately.
- Average fee amount: Varies by company.
- What to do: Use the online payment system to pay right away—or Walmart offers a next-day payment service that will cost less ($4 to $12 versus $50 or more).
8. Duplicate or archived statement fee
If you want copies of a lost or old statement, you will pay by the page.
- Average fee amount: $1 – $10 per statement.
- What to do: The only thing you can do if you have already been charged is to call and negotiate for a waiver. The best way to avoid being charged is to use e-statements instead (and keep copies of old paper statements for at least 12 months as backup).
9. Balance transfer fee
If you decide to take advantage of a balance transfer option (where you transfer the unpaid balance from one credit card to another credit card to give you more time to pay it off in full) you will pay for the transfer itself.
- Average fee amount: 3% of the total value of the transaction.
- What to do: Card companies can choose to charge or waive the fee at their discretion. Calling your company to ask for a waiver or credit is your best option.
10. Closure fee
This fee is assessed by a card company when you want to close your account—horrid, right?!
- Average fee amount: Varies by company—some charge the fee and others do not.
- What to do: If you cannot negotiate a waiver, consider keeping the card open. As well, cancelling a card (especially one you have held for a while) can impact your credit rating.