Annual fee

Most credit cards incur an annual fee which will vary depending upon the services offered. For a premium card, expect to pay anywhere from $100 to $300 annually. For a basic card you may be paying between $40 and $100.

While some cards offer $0 annual fees, they often compensate by increasing the purchase rate.

The annual fee is intended to cover the cost of issuing and administering the card, as well as any additional features such as insurance cover or reward programs.

Overseas transaction fee

This fee is also known as an international transaction fee and a currency conversion fee.

If you use your credit card for purchases while overseas, you can be charged a percentage of the transaction value (in Australian dollars). This is usually on top of any ATM operator fee applied by the overseas merchant or financial institution.

Typically, this fee ranges between 1% and 3%. As an example, a purchase of £100 British Pounds (around $205 Australian dollars at the time of writing) will incur an overseas transaction fee of around $6.15.

Additionally, you're usually hit with an overseas ATM fee of around $5 per transaction.

Don't forget to consider other options such as cash passports or travel cards to avoid this fee and read our guide on choosing a travel credit card.

Duplicate statement fee

If you lose a statement or require an additional copy, your bank is required to provide it, as long as it is requested within a reasonable time frame.

However, the bank is entitled to charge a fee for the preparation and delivery of the statement. This fee usually ranges between $5 and $15.
To avoid this fee, most banks will provide the functionality to download and print statements via Internet banking.

Payment dishonour fee

If you make payments to your account (including automated payments) which later need to be reversed or are dishonoured, your bank can charge you a fee.

The topic of payment dishonour fees is contentious. A recent study found the true cost of payment dishonours to a financial institution (including the administrative costs, lost interest etc) is much lower than the average dishonour fee.

Currently, a payment dishonour can cost you around $10 to $30. To avoid it, ensure you have sufficient funds in any transaction accounts linked to your card for automatic payment.

Emergency card replacement

This fee is also known as a priority fee or card replacement fee.

Ordinary card replacements can take four to six weeks, so if you require a replacement card or PIN number immediately, the bank can charge a fee to assist in covering the costs of express production and delivery.

To avoid card replacement fees, consider having a back-up card, particularly while travelling. Consider cards which offer free additional cards or come with two cards (such as a Visa and an American Express).

Cash advance fee

If you use your credit card to get cash, you'll incur a cash advance fee. This is usually the greater of a percentage (between 1% and 3%) or a flat fee (between $2 and $10).

This is in addition to the operator ATM fee and when you're overseas, it is in addition to any currency conversion fee.

A cash advance is never a good idea. You'll incur the immediate fee, plus you'll usually incur a higher interest rate and any interest free periods won't apply.

Non-bank ATM fee

Using your card at an ATM owned by your bank is usually free, however a transaction at an ATMs owned by another bank often incurs a fee, set by the institution who owns the ATM.

For a credit card, you're unlikely to incur this fee unless you're using your card for cash advances.

Recently, a law was passed permitting ATM issuers to charge any transaction fee, but requiring them to inform the customer of the fee before the transaction occurs. This means that many independent ATMs, found in pubs and hotels have much higher fees than major bank ATMs.

Over limit fee

If you exceed your credit limit, you financial institution can charge a penalty for each statement period your account remains overdrawn.

This fee varies between $20 and $50 and is intended to cover the additional risk exposure and administration incurred by your bank.

Late fee

If you're late paying a bill, you'll be charged a late fee which usually varies between $20 and $50. A late fee is intended to cover the costs incurred by the bank for reminder notices and credit collection activities.

Thankfully, it's an easy fee to avoid. Simple ensure you pay the minimum required amount by the due date each statement period.

Additional cards

If your credit card entitles you to additional cards, your bank may charge a fee of around $10 - $20 per year to cover the cost of issuing and administering the additional card.

Many credit card accounts offer free additional cards.

Balance transfer fee

When you transfer an existing balance to a credit card, you may incur a percentage fee (around 1% - 3%).

If you're considering a balance transfer, you should calculate the balance transfer rate and period against the cost of this fee to ensure the benefit is not negated.

What next?

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