Nobody likes service fees. Late fees or high interest rates from credit cards just throw your hard-earned money away. During the pandemic, some credit card companies were waiving fees. But is that still the case?
Types of Credit Card Fees
When opening a credit card, it’s essential to read the fine print and understand the fees you may be charged. Even if the credit card gives you great rewards, they can be eaten up if you constantly pay fees. There are eight common credit card fees.- Annual fees—Many credit card companies charge an annual fee for doing business with them. This can range anywhere from $95 to $500 yearly. Although some waive the fee the first year you’re with them, you'll be charged yearly after that.
- Late payment fees—When your credit card payment is late, you incur a charge. This could be anywhere from $29 to $40. The cost goes up for violations made within six billing cycles.
- Foreign transaction fee—Any purchases made outside the United States cost an additional fee. This fee is per transaction and is usually 3 percent of the purchase. If you make several purchases with your credit card, the fees can add up fast.
- Interest charges—If you don’t pay off the charges monthly, you'll be charged an interest rate on the balance. The amount of interest is your annual percentage rate (APR). It is listed on your cardholder agreement.
- Balance transfer fee—Every time you transfer your credit card’s debt to another card, you incur a fee. It will usually run between 3–5 percent per transfer. There is a $5–10 minimum charge.
- Over-the-limit fee—If you exceed the limit on your credit card, you'll be charged an over-the-limit fee. But you must opt-in for the credit card to allow you to go over the limit for this to happen. If you don’t opt-in, the credit card will just be declined, and no fee will apply.
- Returned payment fee—If you don’t have enough money in the bank and you try to pay your credit card, the payment will be returned. At this point, the credit card company will levy a fee against you.
- Cash advance fee—You will be charged a three to five percent fee if you receive cash in advance on your card.
Is a Credit Card Fee Waiver Possible?
Many credit card companies will waive fees if asked. They do this as a courtesy to customers with good payment records. But even if you ask, there’s no guarantee that the credit card company will comply.How to Eliminate Credit Card Fees
If you’re worried about a late fee, check to see if the fee is on your statement. You might have a better chance of waiving it if it’s only been a day or two and not on your statement. That’s because the fee hasn’t been charged to your account yet.If you think you’ll have a fee, call customer service. Talk to a representative and explain the situation. Highlight what a good customer you are. If this is your first time incurring this fee, let the rep know that. If you have a strong on-time payment history, you’re more apt to have the fee waived.
You must be calm and polite. But if the customer rep disagrees, ask politely to speak to her supervisor.
A survey by CreditCards.com found that 85 percent of cardholders who asked for a fee to be waived received it, but only 60 percent of cardholders ever made the request.
The representative might also be more amiable to forgive the fee if you meet certain conditions. For example, you offer to spend $1,500 in the next two months. This works if you were going to make the purchase anyway. You don’t want to spend more just to avoid a fee.
Negotiate Better Credit Card Terms
You can go to a credit card issuer with whom you’ve been doing business and ask for better terms. It’s always a good idea to ask for lower rates. This is particularly true if you’ve always paid your credit card on time.Call the issuer and say you would like a lower rate. Say how long you’ve been a customer, and you’ve always paid on time. Mention that you’ve received offers for cards with lower rates and are considering transferring your debt to these cards.
If you’re meeting resistance, ask for a temporary break—for example, a one-year reduction of one to three percentage points.
Mention if your credit score has increased. If you’re financially strapped, it might be worth mentioning as well. Say you just need a break to help you bounce back. The issuer wants to be paid and if they can help you do that, they usually will.
Make sure you document your calls. If you don’t receive the answer you want, call again in three to six months. Asking doesn’t hurt, and you may also want to mention those lower-rate card offers you keep receiving.
Do this with all your credit cards. Fifty-six percent of those surveyed were able to negotiate a lower interest rate.
