Banking, finance, and taxes

Credit Card Issuers Show Growing Appetite for New Fees

credit cards
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The average credit card in the United States carries a total of six different fees. The greatest number of fees charged by any issuer totals 12. Some are common — late fees, for example. Others are unique, like one card that charges a fee of $25 when a customer accepts an increase to the card’s credit limit.

Fee income has become more important to banks as they try to boost revenues. In 2012 bank interest income totaled $67.1 billion, and that dropped to $65.4 billion in 2013 and stayed at that level in 2014. Fee income has risen from $82.5 billion in 2012 to $90.3 billion in 2014. The data were compiled by bank card advisory firm R.K. Hammer and reported in a report released Thursday by CreditCards.com, a wholly owned subsidiary of Bankrate.

Here are the most common fees:

  • Late fees are charged by 99 of 100 cards included in the CreditCards.com survey. The average fee totaled $39 before passage in 2009 of the Credit Card Act. Now the first-time fee is capped at $27 and the fee for subsequent charges is capped at $38.
  • Annual fees are charged by 26 of the cards surveyed, and the fee ranges from $25 to $195. Annual fee payments contributed $10.8 billion issuer income in 2014.
  • Balance transfer fees are charged on 80 of the 90 cards that offer a balance transfer feature. The typical fee comes to 3% of the transfer, and the number of issuers that charge this fee has more than doubled since 2011.
  • Foreign transaction fees are charged by 77 of 100 cards surveyed, and the fee is typically 3% of the value of each transaction.
  • Cash advance fees are charged by 98 of 100 cards and are typically set at $10 or 5% of the transaction, whichever is higher. These are also the most lucrative fees for issuers, having generated $25 billion for issuers in 2014.

The researchers expect credit card fees to stick around, and most likely increase in number, over the years. One possible new fee: a charge to redeem all those reward points you’ve been saving up. Don’t say you weren’t warned.

Travel Cards Are Getting Too Good To Ignore

Credit card companies are pulling out all the stops, with the issuers are offering insane travel rewards and perks.

We’re talking huge sign-up bonuses, points on every purchase, and benefits like lounge access, travel credits, and free hotel nights. For travelers, these rewards can add up to thousands of dollars in flights, upgrades, and luxury experiences every year.

It’s like getting paid to travel — and it’s available to qualified borrowers who know where to look.

We’ve rounded up some of the best travel credit cards on the market. Click here to see the list. Don’t miss these offers — they won’t be this good forever.

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