3 Common Credit Card Charges (And How to Avoid Them)

The average American has a whopping four credit cards at any given time. While those cards make buying things easy, that convenience often comes at a price: credit card charges and fees. And the more cards you have, the more fees you may have to pay.

That doesn’t mean you have to settle for unexpected charges. You just need to be proactive and know what types of fees you may face.

Here are a few of the most common credit card fees and what you can do to avoid them in the first place.

1. Interest on What You Owe

Every credit card issuer charges interest on balances held on the card. That interest rate depends on your credit score and credit history.

However, the larger your balance is, the more you’ll owe the credit card issuer in interest each month.

The only way to avoid interest charges is to pay your credit card balance off in full every month. If you’re currently carrying a balance, do what you can to pay off what you owe as quickly as possible. Avoid using the card for future purchases until you pay the card off.

2. Missed or Late Payment Charges

Your credit card issuer expects you to make the minimum monthly payment on time, every month. If you miss a payment or submit a payment late, they may charge you a fee.

The amount of the fee will depend on the credit card issuer and how many times you’ve missed a payment in the past. The more often it happens, the higher the fee is likely to be.

The best way to avoid these fees is to pay your credit card bill on time. If you can’t afford to pay the full balance, make sure you make the minimum payment by the due date. As long as you make the minimum payment, your credit card issuer won’t penalize you with a late fee.

3. Annual Card Fees

Some credit card issuers charge an annual fee for the privilege of having the card in the first place. Often, these cards have rewards that help offset the cost of the annual fee. However, they’re not the best fit for every credit card user.

Each credit card issuer sets the fee for each type of card they offer. You’ll know how much the annual fee is prior to applying for the card.

Luckily, there are no fee credit cards that you can apply for instead. Many of these cards still offer rewards and many of the same perks as fee-based cards.

Avoiding These Credit Card Charges Is Possible

Avoiding these common credit card charges is easy as long as you know which fees to watch out for. However, avoiding fees alone isn’t the only thing you need to do to use your card responsibly.

Make sure you’re paying your bill on time and avoid charging more on your card than you can afford to repay at the end of the month. This, combined with a solid budget and savings strategy will help you keep your finances in great shape.

Need help creating a budget? Check out our latest posts for more tips and tricks to help you improve your finances.


I am Finance Content Writer. I write Personal Finance, banking, investment, and insurance related content for top clients including Kotak Mahindra Bank, Edelweiss, ICICI BANK and IDFC FIRST Bank.