Thinking of applying for a new credit card? Find out these 3 fees first


Signing up for a credit card can often entitle you to exciting new benefits for cardholders. If you find the right card, you can earn generous rewards and enjoy benefits that add long-term value.

But before you decide to get a new card, it’s crucial to know how much its use could cost you. Always check these three fees before applying for a new card.

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1. Annual membership fee

You owe an annual fee just for having certain cards. Sometimes these fees can be quite high, even going as high as $ 500 for some credit cards. While this may sound like a lot, consider whether the perks offered by annual fee cards are worth paying for. Many cards with high fees offer generous benefits, such as credit for certain purchases, free access to airline lounges or hotel nights, airline tickets for companions, and rewards programs with many bonus opportunities.

Determine how often you’ll use the card to earn rewards and if the membership benefits are worth it before you commit to a card that charges an annual fee.

2. Foreign transaction fees

If you plan to travel outside of the United States or make overseas purchases on the Internet, watch out for cards that have overseas transaction fees.

These fees are often in the order of 3%, and they unnecessarily increase the cost of purchases. If you’re spending money outside the country’s borders, look for a card that won’t charge you for doing so.

3. Interest charges

You can avoid interest charges if you pay off your balance in full each month. But if you carry a balance, the finance charges can be huge.

You don’t want a card with a high interest rate if you don’t pay off your balance in full each month, even if it offers a great rewards program or other generous perks. The cost of a higher interest rate will likely outweigh the value of the benefits.

If you promise to never carry a balance, you might not care about the interest rate. Or you can find a card that offers a 0% promotional rate for a while, which can be a good option if you plan to hold a balance for a short time to fund large purchases. Just make sure you’re sure the balance will be paid off before the promotional rate expires, or you’ll end up with interest.

When looking for a new card, find out about the interest rate and assess the likelihood that you will end up paying high finance charges. If there is a good chance that this will happen, it is best to let the account opening go through.

Considering the interest rate, annual fees, and overseas transaction fees, you can make the right choice as to whether a card is right for you.


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