Credit Card Issuers Show Growing Appetite for New Fees

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.