Credit card companies don’t make money just by charging interest on purchases and cash advances.
They also have a range of fees they use to earn revenue.
What makes these fees so effective is that they add up to a tidy sum of money, yet they tend to fly under the radar.
In other words, a lot of consumers don’t realise how much money they give to their credit card company each year.
Listed below are eight fees you might be paying. As you’ll see, all of them are avoidable.
Annual fees are the most common type of fees people pay – even though they’re entirely avoidable. At the time of writing, a quick check of RateCity’s online comparison tool found 28 credit cards on the market that didn’t charge an annual fee. Although the numbers will bounce around from year to year, it’s almost certain that there will always be at least some cards that don’t impose annual fees.
Late payment fee
These are the fees you get charged if you fail to make your monthly minimum payment on time.
Dishonour fees are imposed whenever a payment to your credit card account is declined.
Overlimit fees are imposed if you exceed your credit limit – although they can be charged only on accounts opened before 1 July 2012.
Cash advance fee
These are the fees you get charged if you want to use your credit card as an ATM card.
Additional cardholder fees
Some credit cards will charge a fee if you add another signatory to your account. However, there are cards on the market that won’t impose a fee.
International transaction fee
You’ll be charged an international transaction fee if you use your credit card during an overseas trip. You can also be slugged with an international transaction fee while you’re in Australia, if you make an online purchase from an overseas-based business.
Paper statement fee
Some credit card companies will charge you a fee if you want to receive your statements by snail mail rather than email.