Credit card fees play a significant role in the card selection process for most American consumers. Generally, one must choose between cards with lower fees and more flexibility—but fewer benefits—and cards with elite membership and abundant rewards programs but higher overall costs. Aside from annual fees, issuers continue to charge relatively similar fees for the common transactions and infractions evaluated in Corporate Insight’s latest report on the topic:
- Annual fees
- Minimum interest charges
- Foreign transaction fees
- Late payment fees
- Returned payment fees
- Balance transfer fees
- Cash advance fees
Most card fees have remained stagnant, though late fees and returned payment fees are trending up
Firms made few changes to their fee structures since we last reported on this topic in 2017. Our 2017 report noted a trend of decreasing credit card fees; however, both maximum late fees and maximum returned payment fees increased this year, with each reaching as high as $39 per infraction.
We saw no changes to minimum interest charges, balance transfer fees or cash advance fees for the cards evaluated in this report. While some firms do not impose a minimum interest charge on any cards, others continue to charge between $0.50 and $2. Meanwhile, balance transfer and cash advance fees have been stagnant, both coming in between 3% and 5% with $5 or $10 minimums per transaction. 2017 was the first year all firms provided at least one card product without foreign transaction fees, and we found that five firms (45%) increased the number of cards they offer without such fees since then. With a few firm-specific exceptions, foreign transaction fees remain constant at around 3%.
Premium offerings are seeing higher annual credit card fees than ever
While the total number of annual-fee-carrying cards remains unchanged from 2017, more card issuers (36%) now offer premium cards with annual credit card fees above $400; this report is also the first instance we have seen of cards carrying annual fees exceeding $450. Still, most cards’ annual fees remain below $100, and one-third of these cards include a first-year fee waiver. Interestingly, more issuers now only promote fee-free cards than in the last iteration of this report. However, as a whole, the coverage set continues to lack card options for fee-averse consumers; some issuers provide fee forgiveness, but only with specific cards.
Key findings and trends
Corporate Insight’s latest report on credit card fees identifies the following key trends and industry findings:
- Maximum late and returned payment fees have increased since 2017
- Annual fees grow as more firms promote premium cards
- Fee-conscious consumers have few options
- Minimum interest charges show no change, unlike in 2017 report
- Balance transfer and cash advance fees remain consistent
- Firms continue to eliminate foreign transaction fees
The report also offers a detailed fee comparison across 11 leading credit card issuers, trend analysis of fees in 2019 versus 2017 and 2014 as well as a comprehensive list of annual-fee-carrying cards from coverage group firms.
Subscribers can view the full credit card fees report on our client portal. For access, or for more competitive intelligence on the customer experience that credit card issuers provide to card holders and prospects, check out Corporate Insight’s Credit Card Monitor service offerings.
