The only way to really know how much a credit card charges is to read the fine print revealing its rates and terms. All cards must post a standard Schumer Box (summarizing interest rates and fees) and an accompanying document disclosing how the credit card works. 

Generally, credit cards for consumers with bad credit have the most fees and the highest interest rates. The reason is simple: Credit card issuers view you as a default risk if your credit is poor, so they attempt to collect as much money upfront as possible to cushion the risk. Some fees drop or fall away on credit cards for better credit. 

Here’s a list of the typical credit card fees and some advice on avoiding them.

1. Annual Fee

Many credit cards charge a yearly fee simply for the privilege of ownership. You pay the initial fee when you open the account and again automatically on each anniversary. This fee range can range from $0 to well above $500, although high-fee cards usually offer excellent rewards and benefits.

How to Avoid: Pick credit cards that do not charge an annual fee. You can find many no-annual-fee candidates for every type of credit (except unsecured cards for bad credit).

2. Processing Fee

Credit cards for consumers with poor credit may charge a one-time processing fee to open a new account. These fees can approach $100, and you must pay it before the issuer will send you the card.

How to Avoid: Unfortunately, it’s hard to avoid this fee until you improve your credit. One way around it is to apply for a secured credit card. They seldom impose a processing fee, although they do require a refundable cash deposit upfront.

3. Monthly Maintenance Fee

This fee is strictly limited to subprime unsecured credit cards. Typically, the cost is around $7/month, and the issuer waives it for the first year. This fee exists only to protect card issuers from deadbeat cardholders. 

How to Avoid: The best strategy is to upgrade your credit during the first year and then switch to a better credit card before your first anniversary. Cards for average or better credit don’t charge this fee.

4. Late Payment Fee

Almost all credit cards charge a fee for late payments. The card will slap on this fee if you don’t submit the minimum payment by the due date. The fee usually ranges from $36 to $49, and a few cards waive it on the first occurrence.

How to Avoid: If you have trouble remembering to pay your bills on time, set up an autopayment plan with your card issuer. You can specify how much to transfer from your checking account – the minimum amount due, a fixed amount, or the entire balance.

We’ll continue our fee review in part 2, covering:

• Returned payments
• Over-limit spending
• Cash Advances
• Balance transfers
• Miscellaneous fees

With a bit of research, you may be able to shave hundreds of dollars off your credit card expenses.