How You Can Avoid Credit Card Fees


A credit card is an important instrument of credit which allows you to spend easily for expenses like shopping, travel bookings, bill payments, paying EMIs etc. You are eligible for a credit card only after fulfilling certain eligibility criteria ie if you have a good credit history. Parameters like the stability of your income, payment track record, CIBIL score are taken into serious consideration. Only after a thorough background check, you are approved for a Credit Card.

Each credit card comes with a number of fees and charges that a customer has to bear in certain scenarios. After paying your credit card bills, these fees and charges are an additional expense to bear and can put pressure on your budget. There are different ways in which you can try to minimize the extra expenses of fees and charges.

Types of fees that you pay for Credit Card –

  1. Annual charges
  2. Late fees
  3. Interest charges
  4. Cash advance fees
  5. Card replacement fees
  6. Balance transfer charges
  7. Returned payment fees
  8. Foreign transaction fees
  9. Over-limit fees

1. Annual fees –

There are some credit card lenders that charge you a small amount annually. The card with annual fees usually has more benefits than cards with no annual fees. If you want to avoid the annual charges on your card, you can opt for a credit card with no annual fees.

2. Late fees –

A late fee is a charge that you incur if you do not pay your minimum amount due. On every due date, you are unable to pay the entire bill, there is a minimum amount (part of the bill) that you can pay. If you do not pay it, you may be charged with late fees. In order to avoid this, you must pay at least the minimum amount due within the given date.

3.  Interest charges –

If you are carrying forward a balance to repaid from month to month, then the lenders levy an interest on that amount that is being carried forward. It is called interest charge or finance charge. This charge largely depends on the APR of your card. You can very easily avoid extra interest charges on your credit card payment by paying your credit card bills in full on time without missing any due date.

4. Cash advance fees –

Some credit cards allow you to withdraw money from ATMs up to a certain limit. The amount charged on cash withdrawals from ATMs via credit cards is the cash advance fees. If you want to avoid this fee, you can try using your debit card for cash withdrawal or direct cash withdrawal from banks.

5. Card replacement fees –

In case if you lose your card or if it gets damaged, you might want a new one and the card lenders might charge you a small fee for a new card. You can ask for a one-time waiver, but it is generally the company’s discretion.

6. Balance transfer fees –

Just like loan balance transfer, if you transfer your outstanding amount from one card to another, you are charged with balance transfer fees. This transfer is usually done to move your debt from a card of high rate of interest to a card of low rate of interest. To avoid this fees, you can look for cards that have zero balance transfer fee.

Read Also – Enjoy Easy Money Transfer With Credit Card

7. Returned payment fee –

In an instance where your account has insufficient funds or for some reason is unable to process the transaction, a repayment fee is charged in response of this. To save yourself from this amount, you should always ensure that there is optimum balance in your account.

8. Foreign transaction fee –

If you travel frequently and make purchases in foreign currency, some credit card app lenders can levy an additional fee. The best way to dodge this fee is to look for a card that does not levy a foreign transaction fee. It can be very helpful if you regularly travel abroad.

9. Over limit fee –

This fee is levied when you have balance more than your credit card limit. But the lenders usually ask for your permission for this. If you do not permit, it is possible that your transaction could be declined. To avoid this, you can simply not choose to pay this. The only consequence will be that you won’t be able to overspend than your credit limit.