4 Common Credit Card Fees You Don't Need to Pay

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Credit card companies set their own terms, but you get some influence over which ones apply to you.

Credit cards have their perks, but they also have their price. And that price can get very expensive if you run up a balance you can't pay back. Choosing the wrong credit card can also cost you in lost rewards and additional fees. The good news is, you can avoid many of these costs by choosing the right card and managing your money responsibly. Here are four credit card fees you don't have to pay.

1. Annual fee

There are so many rewards credit cards available today that don't charge an annual fee, you shouldn't pay for one unless you want to. In rare cases, it might be worth it -- for example, if you're paying for a premium travel credit card that offers free travel vouchers and free luggage. But you should always do the math first to calculate whether the rewards you'll earn outweigh the cost of the annual fee. If not, move on to a different card.

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Read the fine print carefully when signing up for a new card. It may be that the annual fee is only free or discounted in the first year, but then a standard fee kicks in in the second year. Check the cardholder agreement to learn about the card's annual fees, including any promotional rates. 

You may be able to negotiate a reduced annual fee with your card issuer, or even eliminate it completely. But card issuers don't have to agree. If you've had the card for a long time, you can use your loyalty as leverage and threaten to switch to a different credit card if they don't comply. Be prepared to make good on that threat if your card issuer denies your request.

2. Foreign transaction fees

You can incur foreign transaction fees when you use your credit card in a foreign country. This fee is often 3% of the transaction and you'll pay it every single time you use your credit card on your trip. It's possible to rack up quite a bit if you're not aware of these fees. 

Most top travel rewards credit cards don't charge foreign transaction fees, so choose one of these cards if you're planning to travel abroad. Check the cardholder agreement on your existing credit cards if you're unsure about whether they have foreign transaction fees. Another option for getting around these fees is to rely primarily on cash while you're abroad. It's still a good idea to have a credit card for backup, though, in case there's an emergency or you run out of cash.

3. Interest

Everyone knows that if you don't run up a balance you can't pay back, you'll never pay a dime in credit card interest. However, that knowledge isn't especially useful if you already have credit card debt. In this case, you can still avoid interest payments temporarily -- and possibly forever -- if you use a balance transfer card

These cards have 0% introductory APRs for six to 21 months. Pay off your balance within this timeframe and you won't need to pay any more interest. Balance transfers usually have a fee attached -- often a percentage of the balance you're transferring -- but this option will probably still be more affordable than continuing to deal with the interest you are paying right now.

If you cannot pay the full balance back within the introductory APR period, your remaining balance will begin accruing interest at the standard APR unless you transfer that remaining balance to another balance transfer card. 

4. Late fees

Late payments can hurt your credit, and they also come with late fees, which can make your balance more difficult to pay back. Your card issuer may charge you up to $28 for your first late payment and up to $39 for any additional late payments. But you can easily avoid these fees by always paying your credit card bill on time. Set up automatic payments, if possible, or set reminders for yourself so you remember to pay the bill by the due date.

The only things you should have to worry about paying for are the purchases you charge to your credit card. Read through the cardholder agreement before you sign up with a new credit card and make sure you understand all the associated costs. Then, choose and use your cards responsibly so you can avoid the four fees mentioned here.

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