Pentagon Federal Credit Union
Log In Accounts
Search
  • Routing # 256078446
  • Partners
  • Member Discounts
  • Wealth
  • Foundation
  • ATMs & Branches
  • About
  • Search
  • Checking & Savings
    • Checking
      • Free Checking
      • Access America Checking
      • All Checking Accounts
    • Savings
      • Premium Online Savings
      • Regular Savings
      • All Savings Accounts
    • Certificates
      • Money Market Certificate
      • Coverdell Education Certificate
      • All Certificates
    • IRAs
      • IRA Certificate
      • IRA Savings Account
      • All IRAs
    • How Can We Help?
      • Contact Us
      • FAQs
      • Forms
    • Special
      • Access America Checking - Earn more and Get paid early.
  • Credit Cards
    • Our Cards
      • Credit Cards Overview
    • How Can We Help?
      • Contact Us
      • Disclosures
      • Resource Center
    • Special
      • Choose the perfect card - Open Now
  • Auto
    • Auto Loans
      • Purchase
      • Refinance
      • Car Buying Service
    • Protection
      • Vehicle Protection
      • GAP Coverage
      • Debt Protection
    • How Can We Help?
      • Contact Us
      • FAQs
      • Forms
    • Special
      • Unlock your next road trip - Explore Vehicles
  • Mortgage & Home Equity
    • Home
      • Mortgage Home
    • Purchase
      • Apply for a Mortgage
      • PenFed Homes
      • First Time Homebuyer
      • Mortgage Pre-approval
    • HELOC & Refi
      • HELOC
      • Mortgage Refi
    • Loan Types
      • Conventional Loan
      • FHA Loan
      • VA Loan
      • Jumbo Loan
      • VA Refi Loan
    • Tools & Resources
      • Knowledge Center
      • Mortgage Media
      • Mortgage Calculators
      • Contact
    • Special
      • Home affordability sale - View Rates
  • Loans
    • Personal Loans
      • Overview
      • Debt Consolidation
      • Credit Card Consolidation
      • Home Improvement
      • Additional Uses
    • Student Loans
      • Student Loans
    • How Can We Help?
      • Contact Us
      • FAQs
      • Forms
    • Special
      • Personal Loans made easy online
  • Learn
    • Learning Hub
      • Learning Center
      • Mortgage Knowledge Center
      • Financial Assistance Center
      • Natural Disaster Relief Assistance
    • About PenFed
      • About
      • New Members
      • Sponsors
      • FAQs
      • Forms
    • Security & Fraud
      • Security Center
    • How Can We Help?
      • Careers
      • Contact Us
    • Special
      • Learn how we protect your data
  • Join Now
  • Log In
  • Accounts
  • Resources

LEARNING CENTER

To get ahead you have to stay informed.
  1. Home
  2. Learning Center
  3. 8 Common Credit Card Fees You Can Easily Avoid

CREDIT CARDS

8 Common Credit Card Fees You Can Easily Avoid

EXPECTED READ TIME: 5 MINUTES

Published: March 4, 2021

Updated: December 18, 2023

A credit card can be a useful tool in your arsenal when you manage it well. It provides an easy cash flow, a more secure way to pay, and many consumer protections.

That being said, this valuable tool can come at a price in the form of credit card fees. Even though it’s not exactly a fee, paying interest so you can carry your balance from month to month is one of the more common regular costs associated with having credit card. There are a whole host of others, and what you’ll be charged depends on how you use your credit card. 

What We’ll Cover

  • What Are Credit Card Fees?
  • The Common Credit Card Fees to Look Out For

What Are Credit Card Fees?

Credit card fees are charges you could incur as a consumer for opening and using your credit card. Fees and rates will ultimately depend on the issuer. You’ll be provided with what’s called a Summary of Terms when you open a credit card — a summary outlining all the possible charges you’ll pay, often depending on how you manage your card.

credit card icon

Learn how credit cards and credit card interest actually work.

Read More

While some cards can be totally free to use — such as not carrying a balance on one that also doesn’t have annual fees — costs of other credit card fees can add up for different cards. That’s why it’s important to understand what you could be charged so you can factor that into your budget.

It’s important to understand what you could be charged so you can factor that into your budget.

The Common Credit Card Fees to Look Out For

Credit card fees aren’t necessarily bad — like annual fees that offer perks that outweigh what you pay — but it’s usually pretty simple to avoid paying most of them. Here are some of the common credit card fees you’ll encounter:

Interest Charges

Also known as finance charges, this fee kicks in if you decide to carry a balance on your credit card. In other words, if you don’t pay off the full balance after your credit card’s grace period, you’ll be charged interest.

Interest charges are based on your card’s annual percentage rate (APR) and the balance you carry. Since the average credit card rate is in the double digits, carrying a balance can result in high interest accrual.

According to Forbes, the national average credit card interest rate is 28.17%, as of October 23, 2023.

The national average credit card interest rate is 28.17%.

It can be difficult to pay off credit card debt once it begins to build up, so you want to avoid interest charges. To do this, stay on top of your payments and pay off your balance each statement period. Another way to avoid this would be to set up automatic payments.

Annual Fee

This fee is what a card issuer charges each year so you can carry their credit card. Annual fees can range in price, with the more expensive ones offering luxury perks — like access to airport lounges or credits for certain goods and services. If you don’t have a good credit history or have no credit history at all, you may need to pay an annual fee to receive the benefit of carrying a credit card.

Balance Transfer Fee

You could be charged a balance transfer fee when you move your credit card balance from one card to another — usually 3-5% of the amount you transfer. The fee could be worth it, especially if your new credit card offers a low or 0% APR, helping you save money on interest charges in the long run.

dollar sign icon

What you should know about balance transfers.

Learn More

Foreign Transaction Fees

When traveling abroad, many credit card issuers charge an additional fee when making purchases — typically a percentage of your total purchase. This fee is to help offset the cost of converting foreign currency to U.S. dollars. You may even be charged a conversion fee if you make online purchases from foreign retailers. There are credit cards that waive these fees, so make sure to read the fine print before making your decision.

You may be charged a conversion fee if you make online purchases from foreign retailers.

Late Payment Fees

When you are late or miss your payment, you’ll be charged a late payment fee. Most card issuers charge a lower fee for the first instance, but this amount can go up the more times you’re late on your payment. Your late fee can’t be more than your minimum payment. For example, if your minimum payment amount is $25, your late fee cannot be higher than $25.

However, be aware that if you’re more than 60 days late on a credit card payment, your credit card company can increase your interest rate.

Your late fee can’t be more than your minimum payment.

Returned Payment Fee

Your credit card company will charge you a returned payment fee if your payment method doesn’t go through. That could be the case when you set up automatic payments from your bank and you don’t have enough money or the check you sent bounces.

This fee will differ depending on your credit card company, but it's typically similar to your late fee.

It can be difficult to pay off credit card debt once it begins to build up.

Cash Advance Fees

A cash advance is where you can use your credit card like your ATM card. Basically, you can use your credit card at an ATM or with a bank teller to take out a certain amount of cash. This amount will then be added to your credit card balance. Cash advance fees will either be a flat fee or a percentage of the amount you took out.

Plus, the APR for cash advances can be different from the standard rate you use for purchases made on your card. You’ll also be charged interest on the day you receive your cash advance, unlike purchases where you have a grace period.

The APR for cash advances is different from the standard rate you use for purchases.

Over Limit Fee

When your credit card balance goes over your credit limit, you’ll be charged an over the limit fee, but it’s not common that a card will let you charge anything past the limit. If you don’t opt in to a program with over the limit capability, your transaction will likely be declined if it ends up exceeding the limit.

Be sure to do your research before choosing a credit card.

The Takeaway

Using a credit card allows for a lot of great benefits — more flexibility in spending, the ability to build your credit score, and the chance to start financially responsible habits. That being said, credit card fees can sneak up on you if you aren’t careful or don’t read the fine print. Be sure to do your research before choosing a credit card.

See Your Credit Card Options

Get a closer look at the credit cards we offer and their perks, benefits, fees, and rates.

Learn More

SIMILAR ARTICLES

Are Credit Union Credit Cards Better Than One From Banks?

If you are wondering if a credit union credit card is better than one from banks, PenFed is here to teach you about their differences and the benefits of getting a credit union credit card.

man using ATM

What to Know About Credit Card Balance Transfers

A credit card balance transfer allows you to move existing credit card balances to other credit cards. Here is everything else you need to know.

hands typing on computer

5 Questions to Ask Yourself Before Choosing a Credit Card

From flashy card designs to fees in the fine print, if choosing a credit card makes your head spin, this guide is just what you need to you narrow it down.

hands holding credit cards

How Do I Improve My Credit Score?

You might be asking yourself; how do I improve my credit score? Follow these tips to manage finances and watch your credit score grow.

man in coffee shop looking at laptop
  • ATMs & Branches
  • Careers
  • Foundation
  • Contact Us
  • Security Center

This credit union is federally insured by the National Credit Union Administration. Rates are current as of May 2025 unless otherwise noted and are subject to change.

APY = Annual Percentage Yield
APR = Annual Percentage Rate


  • facebook
  • twitter
  • linkedin
  • youtube
  • instagram
Download the PenFed app on Apple Store Download the PenFed app on Google Play
Read More about Equal Housing
Routing #256078446

©2025 Pentagon Federal Credit Union

Privacy
Disclosures
Fees
Rates
Forms
Site Map

Head’s Up!

You are about to visit a third-party site not affiliated with PenFed.org.

penfedcu.sparrowfi.com sparrowfi.com penfed and traveller logo penfed and seguros logo penfed and national car logo penfed and trustage logo PenFed and CampusDoor logo PenFed and Ascent logo PenFed and Ascent logo penfed and househappy logo penfed and benefit services logo penfed and chubb logo penfed and alpha logo penfed and crutchfield logo penfed and ftd logo

This content is from a third-party website. PenFed Credit Union is not responsible for its information.

Continue

Get Started

×

LOGIN

JOIN