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What Are the Most Common Credit Card Fees?

7 min read

Last Updated: November 5, 2025

Table of contents

Key Takeaways

Not all credit cards charge the same fees, and the amounts can vary widely.
Some common credit card fees include annual fees, foreign transaction fees, and late payment fees.
Discover has no annual fee on any of our cards.

Credit cards have fees. It’s important to understand what they are and how they work so you can avoid the unnecessary ones. There may be some you can’t avoid, but you can take steps to minimize them.

Here are some of the most common credit card fees every credit card user should be aware of, along with some tips to help you avoid them.

Interest

If you don’t pay your statement balance in full each month, your card issuer may charge you interest on your balance. These interest charges can add up fast, especially if you let them accrue month after month. That’s what leads to credit card debt, something you should strive to avoid.

When you apply for a credit card, you’ll see the annual percentage rate (APR) for your purchases. You should also be able to find this information in your card agreement. It may also appear on your monthly statement.

Want to see how much you’ll pay in interest on your credit card debt?

You can use the Discover^® Credit Card Interest Calculator to find out. You can experiment with different monthly payments to see how long it will take to pay off the debt. You’ll also see how interest charges add up over time.

Credit card annual fee

Some cards come with annual fees. An annual fee is basically the price you pay to have the card for another year. Usually, you’ll get a charge from the credit card company once a year for the stated fee. Some cards have small fees, while others can cost hundreds of dollars every year.

Annual fees are often associated with rewards and premium cards. You can still have a rewards card without an annual fee. But those with fees often have higher rewards rates.

If you’re considering a card with an annual fee, make sure the rewards you can earn are worth more than that fee.

Some cards offer promotions that waive the first year’s fee. Review the terms carefully to make sure you don’t have a surprise bill after your first year of card membership.

Some credit cards don’t charge annual fees at all. Discover has no annual fee on any of our cards. That’s true of our rewards cards, student credit cards, and more.

See if You’re Pre-Approved

Foreign transaction fee

If you plan to travel outside the United States, check if your card charges foreign transaction fees. These are fees applied to purchases made in countries outside the one where you got the card. You’ll usually see them if you make a purchase in another currency, and they’re usually applied as a percentage of your purchase.

Discover^® has no foreign transaction fee. This is great for students who might spend a semester abroad or if you have a trip planned and want to avoid international fees.

It’s also important to be conscious of foreign transaction fees even when you’re not traveling. They may apply at home if you buy from an overseas vendor, like a foreign airline or online merchant. If you’re paying in another currency and converting to your home currency, you might get a foreign transaction fee.

Balance transfer credit card fee

A balance transfer lets you move debt from one card to another. If the second card has a lower interest rate, this can save you money in the long run. Card issuers may charge a balance transfer fee when you make the transfer. This fee usually ranges from 3 to 5% of the total amount transferred.

Before you transfer any balances, it’s important to factor in the fee. It could have an impact on how much (and whether) you’ll save money if you’re moving to a lower-interest card.

You can use the Discover Credit Card Interest Calculator to compare the interest you’d pay on your current card to your interest on the new card. If the savings is larger than the balance transfer fee, you could save money with the balance transfer.

You may be able to avoid these fees by finding a credit card with no balance transfer fee or a card with a promotion waiving fees or interest on the transferred balance for a limited time. Plan to pay off the transfer before the promotion expires to maximize your savings.

Cash advance fee

A cash advance lets you borrow cash from your credit account. It’s an easy way to get cash fast, but fees and interest can make it expensive.

A cash advance fee is typically a percentage of the amount withdrawn. For example, if your card issuer charges a 5% fee and you take a $100 cash advance, you’ll pay $5. You’ll basically add $105 to your credit card bill and get $100 in cash.

It’s also worth noting that the interest rate on cash advances might be higher than the rate you’d pay on standard purchases.

In general, it’s best to avoid taking cash advances from your credit card. And, if you do, try to pay it off as quickly as possible.

Late payment fee

If you miss a credit card payment or pay less than the minimum due, your card issuer will charge you a late payment fee. The issuer could also report the late payment to credit bureaus. This late payment may appear on your credit report and hurt your credit score.

Late fees vary, so check your card agreement if you want the details. If you make a payment more than 60 days late, you could also receive a penalty interest rate. This could be much higher than your regular interest rate and cost you a lot more in interest charges over time.

If you miss a payment, call your credit card company as soon as possible. If it’s your first time missing a payment, they may be able to waive the fee.

Consider automatic payments to avoid late fees. By making your minimum payment or paying off the entire statement balance, you’ll avoid late fees. And if you pay your statement balance every month, you’ll keep yourself out of credit card debt.

Did you know?

Your payment history is one of the most important parts of your credit score. A good credit score can help you get new credit cards or loans in the future and better interest rates.

Over-the-limit credit card fee

You might get an over-the-limit fee if you make a purchase that exceeds your credit limit. In most cases, you won’t be able to do this. If your card is maxed out, your credit card transaction will be denied.

But some card issuers will let you authorize spending over the limit. This gives you some flexibility with your spending, but you’ll pay a fee if you spend more than your limit.

Returned payment fee

Returned payment fees apply when you try to pay your credit card bill but the payment doesn’t go through. This could happen if your bank account has insufficient funds or you’ve closed that account.

Returned payment fees vary by card, and some credit card issuers may also charge an additional late fee if you don’t send an alternate payment prior to your due date.

The bottom line

Fees can be a necessary part of having and using a credit card. But you can avoid unnecessary fees by making some smart choices.

You can start by choosing a credit card with no annual fee or foreign transaction fees. After that, make your payments on time to avoid late payment fees. Minimize cash advances, as fees on those can get quite expensive. Don’t go over your credit limit. And be sure your payments are going through successfully to avoid returned payment fees.

By using your card responsibly and making smart financial choices, you can avoid a whole slew of unnecessary fees.

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