Card Basics

Part of being a responsible card holder is to understand how card fees work. It is important to read the cardholder agreement when your card arrives, file it someplace where you can find it if you need to refer to it, and feel free to call your card issuer to clarify terms and ask questions.

Fees range from annual fees, levied on all card holders, to fees for certain kinds of optional transactions, such as balance transfers and cash advances. Other fees are punitive, levied whenever a card holder violates the terms of a card agreement.

The following are the most common card fees:

• Annual fees are common on charge cards, rewards cards and airline miles credit cards, and on secured and sub-prime cards.
• Many secured and sub-prime cards charge an application fee.
• Card companies usually charge balance transfer and cash advance fees.
• Fees made outside the U.S. may incur a charge for foreign currency exchange.
• There may also be a fee if you request additional copies of a monthly statement.
• Penalty fees usually are charged for late payments; purchases made over the credit limit; and returned checks, if your bank account didn’t have adequate funds.

In addition to a penalty fee, a card issuer may raise the interest rate on your credit card. American Express Cardmembers should refer to their Cardmember Agreement for more information on fees and penalties.