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Credit card fees for cardholders

The convenience of a credit card comes with costs. As well as having to pay interest on the money you borrow to make credit card purchases, you’ll often have to pay fees to your credit card provider.

Why do credit cards have fees?

Banks and other credit card providers often use fees to help offset the cost of providing extra features and benefits on a credit card. The more bells and whistles a credit card has, the more likely you’ll need to pay fees.

Fee-free credit cards are more likely to be no-frills cards, offering a convenient access to a line of credit for making purchases, but few additional benefits.

What types of fees are on credit cards?

Different credit cards charge different fees, depending on the type of card and its features. Not every card charges every type of fee, though some are more common than others.

Credit card fees may be charged once a year, once a month, or each time a particular feature is used. You may be able to negotiate to get some of your credit card’s fees to be discounted or waived, depending on the card’s provider and what terms and conditions you can fulfil.

Types of credit card fees:
Account servicing fee An ongoing fee covering your card’s admin costs.
Additional cardholder fee Charged each time you add another cardholder to your credit card account e.g. for each family member who is issued their own card that’s linked to yours.
Annual fee Charged each year to cover the card’s admin costs.
Balance transfer fee Charged when you switch to a new credit card and bring the balance you had owing with you.
Card replacement fee Charged when you order a new credit card if yours is lost or stolen.
Cash advance fee Charged each time you use your credit card to withdraw cash from an ATM or make a similar cash transaction.
Chargeback fee Charged when you ask your credit card provider to reverse a credit card transaction, such as fraudulent transactions, or if you’ve been charged twice for a purchase.
Currency conversion fee Charged when you make a transaction in foreign currency, whether you’re shopping online or travelling overseas. Separate to the cost of differing currency values.
Dishonour fee Charged if your credit card is declined when you try and make a transaction, such as when you’ve reached your maximum credit limit.
Establishment fee Charged when you successfully apply for a credit card, covering the admin cost of setting up your account.
Foreign transaction fee Charged when you make an overseas purchase, in person or online. Covers the cost of processing your transaction through overseas banks, separate to currency conversion costs.
Late payment fee Charged if you fail to make your credit card’s minimum repayment on time.
Non-network ATM fees Charged if you use your card in an ATM outside the bank’s fee-free network of affiliated ATMs (not specifically a credit card fee).
Over limit fee Charged if you go over your credit card’s maximum limit.
Paper statement fee Charged to cover the cost of printing and posting paper credit card statements. Sometimes called a duplicate statement fee.
Payment handling fee Charged for making in-person payments when you visit a branch.
Reward program fee Charged to cover the costs of your card’s reward program. The more rewards you could potentially earn, the higher the fees you may need to pay.

Credit card fees for merchants

Australians who run shops, cafés or other small businesses may have different credit card fees to think about than many other people. Every time a customer pays with a credit card, it may cost the merchant money to accept their transaction. 

Credit cards charge merchant fees to help cover the costs of processing credit card transactions between the customer’s bank, the merchant’s bank and the credit card network provider (e.g. Visa, Mastercard or American Express).

Some businesses choose to absorb the costs of accepting credit card transactions, or set a minimum transaction value on credit card payments to avoid losing money on low-cost transactions.  

It is also legal to charge a fee for using a credit card in your business. These credit card surcharges can help businesses to manage the costs of processing credit card payments. 

The Australian government banned excessive credit card surcharging in 2017. These credit card surcharging laws mean merchants aren’t allowed to impose higher surcharges on credit card transactions than the cost of accepting a credit card payment.

Because some credit cards have higher acceptance costs, they may require different surcharges. Charging a single percentage surcharge is also allowed, as long as it’s based on the lowest average cost of acceptance.


If your average cost of acceptance is 1% for Visa Debit, 1.5% for Visa Credit, and 2% for American Express, if you charged a single surcharge it would have to be for 1%, as this is the lowest of all payment systems. 

While the average of all three payment types comes to 1.5%, you would not be allowed to surcharge this much.

Flat surcharges are also allowed, though merchants need to be careful that these fees aren’t excessive compared to the lowest average cost of acceptance, especially for low-cost credit card transactions.


If you put a flat 50c surcharge on credit card transactions in your café, and someone bought a $4.00 coffee using Visa Debit, you’d be effectively charging them an extra 12.5% – much more than the 1% cost of acceptance for a Visa Debit transaction, which would come to just 4 cents.