Credit Card Fees: Types, Costs and How To Avoid Them

A credit card fee is a charge your card issuer adds to your account for using the card, carrying a balance or breaking a card rule. The six most common credit card fees are:

• Annual fees: A yearly charge just for having the card.

• Interest charges: The cost of carrying an unpaid balance from month to month.

• Late payment fees: A charge for missing your due date.

• Balance transfer fees: A charge for moving debt from one card to another.

• Cash advance fees: A charge for pulling cash from your credit line.

• Foreign transaction fees: A charge for purchases made outside the U.S. or in another currency.

Knowing what each fee does — and when it hits — helps you pick the right card and keep more money in your pocket.

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Key Takeaways

• Credit card fee: A charge an issuer adds for using the card, carrying a balance or violating the card's terms.

• Annual percentage rate (APR): The yearly interest rate on a carried balance — avoidable by paying in full each cycle.

• Late payment fee: A penalty for missing your due date — a safe harbor of up to $30 for a first offense and $41 for a later one within six billing cycles, though issuers can charge more if cost-justified.

• Balance transfer fee: A charge, usually 3% to 5%, for moving debt from one card to another.

• Cash advance fee: A charge, usually 3% to 5% with a minimum, for pulling cash from your credit line, with no grace period.

• Foreign transaction fee: A 1% to 3% charge on purchases made abroad or in another currency.

• Interchange fee: The fee a merchant's bank pays your issuer per transaction, baked into prices rather than paid by you directly.

• Surcharge: An extra fee a merchant can add for paying by credit card, capped at 3% by the major networks, banned in a few states and effectively restricted in California under its all-in pricing law.

Summary generated by AI, verified by MoneyLion editors

What Is a Credit Card Fee?

A credit card fee is a charge your card issuer adds to your balance for using the card or for violating the card's terms. Some fees are set when you open the account, like an annual fee. Others only apply if you do something specific, like pay late, take out a cash advance or use your card in another country. Every fee your card can charge is listed in the cardholder agreement and the Schumer box — which lists a card’s rates and fees — on your application.

Credit Card Fees at a Glance

Here is a quick look at the most common credit card fees and how to avoid them.

All rate and fee figures are current as of August 2026.

11 Types of Credit Card Fees

Understanding these fees can help you choose a credit card that best suits your financial needs and usage habits, as well as help you avoid unnecessary charges. Always read the terms and conditions of your credit card agreement to be fully aware of the potential fees.

1. Annual Fees

• Description: A yearly credit card charge. With cards that charge them, you’ll typically pay an annual fee when you open the card (unless it’s waived for the first year) and again on your card anniversary each year.

• Typical range: Annual fees on basic rewards cards usually run $25 to $95 a year. Mid-tier travel and flexible points cards range from $95 to $250. Premium travel cards can charge $250 to $895, but they often come with perks like airport lounge access, travel credits and statement credits that can offset the cost.

• Notes: Some cards have no annual fee, especially entry-level cards or those designed to attract new customers.

2. Interest Fees 

• Description: Interest, or annual percentage rate (APR), that’s charged on the unpaid balance carried over monthly.

• Typical range: According to Federal Reserve data, the average credit card interest rate as of May 2026 is 22.15%, but your APR will vary depending on your credit score and the specific card. You’ll only pay interest if you carry a balance past your due date. Paying your full statement balance each month means you pay $0 in interest.

• Notes: Avoidable by paying the full balance each month.

3. Late Payment Fee

• Description: A charge for not making the minimum payment by the due date.

• Typical range: Late payment fees are capped by federal rules. Late fees at most major issuers run up to $30 for a first missed payment and up to $41 for another late payment within the next six billing cycles (as of August 2026).

• Notes: The Consumer Financial Protection Bureau (CFPB) rule that would have capped most credit card late fees at $8 was vacated by a federal court in April 2025. The cap is no longer in effect. Most large issuers now charge up to $30 for a first late fee and up to $41 for another late payment within the next six billing cycles.

4. Balance Transfer Fee

• Description: A fee for transferring a balance from another credit card.

• Typical range: 3% to 5% of the transferred amount.

• Notes: Often comes with a promotional lower interest rate, such as those on 0% APR balance transfer credit cards.

5. Cash Advance Fee

• Description: A fee for withdrawing cash using a credit card.

• Typical range: 3% to 5% of the amount advanced, with a minimum fee of $5 to $10.

• Notes: Usually accompanied by a higher interest rate and no grace period.

6. Foreign Transaction Fee

• Description: A charge for transactions made in a foreign currency or through a foreign bank.

• Typical range: 1% to 3% of the transaction amount.

• Notes: Some cards offer no foreign transaction fees, making them ideal for travelers.

7. Over-the-Limit Fee

• Description: A fee for exceeding the card’s credit limit.

• Typical range: Up to $35.

• Notes: Less common due to CARD Act regulations, and requires cardholder opt-in.

8. Returned Payment Fee

• Description: A fee for a payment returned due to insufficient funds or other issues.

• Typical range: Up to $41.

• Notes: Similar to a bounced check fee.

9. Credit Limit Increase Fee

• Description: A charge for requesting a higher credit limit.

• Typical range: Varies by issuer; not very common.

• Notes: Some issuers may offer this service for free.

10. Card Replacement Fee

• Description: Replacing a lost or stolen card.

• Typical range: $5 to $25.

• Notes: Expedited delivery may incur higher charges.

11. Reward redemption fee

• Description: A fee for redeeming rewards points or miles.

• Typical range: Uncommon. For example, American Express Membership Rewards® charges a fee of $0.0006 per point, with a maximum fee of $99, when you transfer points to U.S. airline partners.

• Notes: Most rewards programs do not charge this fee.

A personal loan may be helpful if you need to consolidate credit card debt. Oftentimes, overwhelming credit card debt is accompanied by a number of these different fees. MoneyLion can help you find personal loan offers that could be used to consolidate credit card debt:

How To Avoid Credit Card Fees

Avoiding credit card fees is easier than you might think. Here are some tips to keep those charges at bay:

1. Pay your balance in full: You can avoid interest fees entirely by paying your full balance each month.

2. Set up automatic payments: This helps ensure you never miss a payment and avoids late fees.

3. Choose the right card: If you travel often, look for cards with no annual fees or foreign transaction fees.

4. Be aware of deadlines: Know when your payment is due and pay on time.

5. Limit cash advances: Avoid using your credit card for cash advances due to high fees and interest rates.

6. Read the fine print: Always read the terms and conditions to understand all potential fees.

Interchange Fees, Surcharges and Processing Fees Explained

Some credit card fees are paid by shoppers, and some are paid by businesses. Three terms come up a lot, and they are not the same thing.

• Interchange fees: Fees the merchant's bank pays to your card's issuing bank each time you swipe, tap or enter your card. These usually run 1.5% to 3.3% of the sale. You don't pay this fee directly, but it is baked into what businesses charge.

• Surcharges: An extra fee a business can add to your bill when you pay with a credit card instead of cash or debit. Surcharges cover the merchant's cost of accepting the card and are capped at 3% by the major card networks (as of August 2026).

• Processing fees: The total cost a business pays its payment processor to accept a credit card. Processing fees include interchange, network fees and the processor's markup, and they usually land between 1.5% and 3.5% per transaction (as of August 2026).

Credit Card Processing Fees for Business Owners

If you run a business and take credit cards, you pay a processing fee on every sale. Processing fees typically range from 1.5% to 3.5% per transaction (as of August 2026). The exact rate depends on three things.

• Card type: Rewards cards and business cards carry higher interchange rates than basic debit or no-frills credit cards.

• How the card is used: In-person tap-to-pay sales cost less than keyed-in or online sales because the fraud risk is lower.

• Your processor: Flat-rate processors charge one blended rate, while interchange-plus processors pass through the network cost and add a small markup.

To lower your processing costs, compare quotes from more than one processor, batch out sales daily and encourage in-person payments when you can.

Can Merchants Charge Credit Card Fees?

Yes, merchants can charge a credit card surcharge in most states, but the rules are tight. A surcharge is an extra fee a business adds when you pay with a credit card instead of cash or debit. Businesses that add a surcharge cannot charge you more than 3% of the transaction, per rules set by Visa, Mastercard, American Express® and Discover® (as of August 2026). Some states set lower limits, so the cap you see may be smaller than 3%.

Merchants also have to tell you about the surcharge before you pay and list it on your receipt.

States That Ban or Cap Credit Card Surcharges

Surcharge rules change by state. Here’s where things stand as of August 2026.

• States that ban credit card surcharges outright: Connecticut and Massachusetts prohibit surcharges, and Puerto Rico bans them as well.

• States with surcharge caps or added disclosure rules: Colorado caps surcharges at 2%. Maine allows surcharges but requires clear disclosure at the point of sale. Minnesota, New York, and New Jersey allow surcharges but require that the total price (including the surcharge) be posted before checkout. Oklahoma allows surcharges with disclosure rules.

• California — effectively off the table for most purchases: California's old surcharge ban was struck down in court, but a newer law changed the picture. Under SB 478, the "Honest Pricing" law that took effect July 1, 2024, businesses must show the full price upfront, including any mandatory card fee — so adding a separate credit card surcharge at checkout isn't allowed for most purchases. Restaurants are a narrow exception if the fee is clearly listed on the menu.

• States where courts have struck down surcharge bans (surcharges now allowed with disclosure): Florida, Kansas, Texas and Utah.

• All other states: Surcharges are allowed as long as the business follows the 3% network cap and posts clear notice at the register and point of sale.

Rules shift and enforcement varies, so check your state attorney general's guidance before assuming a surcharge is allowed.

Debit card surcharges are banned across the country under federal law. However, some merchants get around this by offering a discount for cash transactions.

Master Your Credit Card Game

Credit card fees can add up quickly and take a significant bite out of your finances. Understanding what each fee entails and how to avoid them allows you to make smarter decisions and keep more money in your pocket. Remember, staying informed and proactive about your credit card usage is the best way to avoid fees.

Credit Card Fee FAQs 

How much does a credit card cost per month?

If you pay your balance in full each month and carry a no-annual-fee card, your credit card costs $0 per month. If you carry a balance, expect to pay interest at around 20% to 28% APR on what you owe. Cards with annual fees add another $2 to $75 per month, depending on the card.

Are credit card fees worth it?

A credit card fee is worth it when the card's rewards, perks or savings add up to more than what you pay. For example, a $95 annual fee card that gives you $50 in travel credits and up to 5x points on purchases can pay for itself if you use the benefits. A fee is not worth it if you rarely use the card or skip the perks.

Can credit card fees be waived?

Yes, some credit card fees can be waived if you ask. Call your issuer, mention your on-time payment history and request a one-time waiver — late fees and annual fees are the most likely to come off.

Are foreign transaction fees avoidable?

Yes, foreign transaction fees are avoidable. Pick a card that advertises no foreign transaction fees before you travel or shop from overseas sellers.

What is the most common credit card fee?

The most common credit card fee is the late payment fee. Most large issuers charge up to $30 for a first late payment and up to $41 for another late payment within the next six billing cycles (as of August 2026).

Do all credit cards charge an annual fee?

No, many credit cards have no annual fee. Cards that do charge one usually offer richer rewards or travel perks to offset the cost.

What is a cash advance fee?

A cash advance fee is what your issuer charges when you use your credit card to pull cash — usually 3% to 5% of the amount, with a $10 minimum. Interest on a cash advance also starts the day you withdraw the funds, with no grace period.

Key Terms

• Credit card fee: A charge an issuer adds for using the card, carrying a balance or violating the card's terms.

• Annual percentage rate (APR): The yearly interest rate on a carried balance — avoidable by paying in full each cycle.

• Late payment fee: A penalty for missing your due date — a safe harbor of up to $30 for a first offense and $41 for a later one within six billing cycles, though issuers can charge more if cost-justified.

• Balance transfer fee: A charge, usually 3% to 5%, for moving debt from one card to another.

• Cash advance fee: A charge, usually 3% to 5% with a minimum, for pulling cash from your credit line, with no grace period.

• Foreign transaction fee: A 1% to 3% charge on purchases made abroad or in another currency.

• Interchange fee: The fee a merchant's bank pays your issuer per transaction, baked into prices rather than paid by you directly.

• Surcharge: An extra fee a merchant can add for paying by credit card, capped at 3% by the major networks, banned in a few states and effectively restricted in California under its all-in pricing law.

Sources

• Federal Reserve: Consumer Credit (G.19) / Credit Card Interest Rate 

• CFPB: Credit card late fees (Regulation Z penalty fees rule) 

• CFPB: What fees do credit cards charge? 

• FTC: Credit card surcharges and disclosures 

• Merchant Cost Consulting: California surcharge rules (SB 478) 

Summary generated by AI, verified by MoneyLion editors

Photo credit: torwai / Getty Images / iStockphoto