The banking company Citigroup was fined over $700 million, mainly for misguiding customers about fees and utilizing perplexing language to increase the chances of clients buying into services they did not need.
This event gives us a reminder of the importance of revising monthly statements regularly for any charges out of the ordinary.
On average most credit cards often have six charges— but a few can charge up to 12 — in a study of 100 cards by CreditCards.com. Most credit card fees, like late payments, cash advances, and transfer fees are common. Some credit cards have fees for services others provide at no cost.
“The reality is that even though banks make billions of dollars off of these fees, the majority can be avoided,” says Matt Schulz, senior industry analyst for Creditcards.com.
The following is a list of some of the unexpected fees — and what you can do to avoid them.
Fees for new account. The First Premier Bank Credit Card has a fee of $95 when opening an account. This fee is around the same as the annual charge for other cards, but of the 100 credit card companies surveyed, it is the only one that charges this fee.
Cost of Re-opening an account. Clients who cancel their cards but later end up regretting it and wish to re-open an account will be required to pay a fee. Some American Express credit cards charge a $25 fee to re-open an account.
Printing costs. Credit card companies may charge around $1 to $5 for printing copies of monthly reports. For some companies, they charge a fee for requests of older monthly reports.
Higher credit limit fee. The Credit One Visa Platinum card has a $49 fee for clients requesting a higher credit limit and First Premier Bank’s Credit Card has a fee of 25% of the credit limit raised. It sounds contradicting — one would think the company wants you to rack up your credit use? But Schulz says companies may be working with clients who are repairing their credit file that in turn could make them appear as a liability to credit card companies.
Paying over the phone fee. A few credit card companies have $10 to $15 fees for clients that choose to pay through the phone via a customer service representative and not through automatic phone service. Clients that choose to pay online or by automatic payments can generally avoid these additional charges.
The income credit card companies accumulate from these fees keeps increasing as clients continue improving on paying their balances on time in order to avoid interest charges. Total earnings from fees went up from $79.9 billion to $90.3 billion in 2014 based on information from R.K Hammer, a credit card advising firm. The report states that Credit card companies will continue placing more fees as they look for ways to increase their earnings.
Consumers can still avoid these fees by researching different cards and choosing the one that fits best with their spending and payment tendencies, Schulz says. Also a few may receive a decrease on fees if they simply request for one. For example, roughly 90 percent of clients who requested for late-payment fees to be forgiven were allowed that request, states a separate survey by CreditCards.com.