What Are The Different Credit Card Fees And How To Avoid Them?

Credit cards come with various fees and charges, which can catch some users by surprise. Here’s a complete guide to the different credit card fees you may encounter and how to avoid them (if possible). 

The most attractive thing about credit cards is the rewards they offer on your spending, as well as the various perks and privileges that cardholders can enjoy. 

In exchange, credit cards come with some charges and fees, partly to offset the costs of these rewards and privileges, but also as a means to manage the risk of credit defaults. Fees are also imposed to cover the administrative costs of maintaining your credit card account. 

Read the cardholder’s agreement and you’ll find a mind-boggling list of credit card fees and charges that come attached to that shiny new credit card. 

You don’t have to worry about paying the entire list of fees, though, especially if you’re careful about using your credit card and diligent about paying off your bills on time. 

Nonetheless, it is still good to be aware of them, as well as how you can avoid them. 

Table of contents

• Annual card fee
• Interest charges
• Late fees
• Cash advance fee
• Foreign currency transaction fee
• Frequently Asked Questions (FAQs)

Common credit card fees and charges and how to avoid them

Annual card fee

The annual card fee is akin to a membership fee that you pay in exchange for enjoying the various rewards, perks and benefits offered by your card. It is a fixed fee that is charged to your credit card account on the anniversary of your card membership, although it may be altered at the card issuer’s discretion. 

If you have supplementary cards linked to your account, note that each may have an annual fee attached too. However, this is likely to be a smaller amount than that charged on the principal card. 

How much do credit card annual fees cost in Singapore?

Credit card annual fees typically range from around  S$200 for entry-level cards to S$600 or more for premium cards like the Visa Infinite cards. While many credit cards charge an annual fee, not all cards do. 

Here are the annual fees for some popular credit cards in Singapore. 

Credit card	Annual fee (incl. GST)	Fee waiver
AMEX Singapore Airlines KrisFlyer Credit Card Apply Now	S$179.85	First year waived
AMEX CapitaCard	S$174.40	First year waived
CIMB World Mastercard Apply Now	None	n/a
CIMB Visa Infinite Card Apply Now	None	n/a
Citi PremierMiles Card Apply Now	S$196.20	First year waived
Citi Rewards Card Apply Now	S$196.20	First year waived
DBS yuu Visa Card Apply Now	S$196.20	First year waived
DBS Altitude American Express Card Apply Now	S$196.20	First year waived
DCS Cashback Card Apply Now	S$196.20	First year waived
DCS Ultimate Platinum Mastercard	S$196.20	First year waived
HSBC Advance Credit Card Apply Now	S$196.20	First year waived
HSBC Revolution Credit Card Apply Now	None	n/a
Maybank Visa Horizon Signature Card Apply Now	S$196.20	First year waived
Maybank World Mastercard Apply Now	S$240	First year waived
OCBC 365 Credit Card Apply Now	S$196.20	First two years waived. Thereafter, waived with min. spend of S$10,000 per year
OCBC Infinity Cashback Card Apply Now	S$196.20	First two years waived. Thereafter, waived with min. spend of S$10,000 per year
Standard Chartered Smart Credit Card Apply Now	None	n/a
Standard Chartered Journey Credit Card Apply Now	S$196.20	First year waived
UOB ONE Card Apply Now	S$196.20	First year waived
UOB PRVI Miles Card Apply Now	S$261.60	First year waived

See also: Best No Annual Fee Credit Cards in Singapore

How to avoid credit card annual fees

Apply for cards with no annual fees

As you can see from the list above, not all credit cards charge an annual fee. Hence, one way to avoid credit card fees is to only apply for credit cards that do not have one. 

But given the small number of credit cards in Singapore that offer perpetual waiver of annual fees, you may find yourself having to choose from a limited selection, or having to miss out on credit cards with the rewards and perks that you want. 

Make use of the fee waiver

Many credit cards waive their annual fees for at least the first year, so you can make use of the credit card during the waiver period without paying a fee. 

Some credit cards automatically waive your annual fee if you spend a certain amount before the year is up. So if you’re regularly spending at or more than the waiver limit, you will likely never see the annual fee listed on your statement. 

Ask for an annual fee waiver

If you have a credit card that doesn't explicitly offer to waive your fee, don’t be discouraged. You can still contact your card issuer and request a fee waiver. Look through your mobile banking app to see how you can do so – many banks have a built-in function where you can request for an annual fee waiver in just a few taps. 

If online channels are not available, you can call your bank to request a fee waiver over the phone. Your request may be honoured on the spot, in which case you can simply get on with your day, as the annual fee will be reversed from your statement. 

If your request is declined, you can ask if there’s anything you can do to get your fee waived. Often, your fee can be waived if you spend a certain amount on your credit card. But customer service agents aren’t allowed to disclose this sum (remember, the phone calls are recorded), so don’t threaten or get annoyed at them. 

Instead try to see if they give you a hint. If the amount seems minor, charge the amount to your card, and try to get your annual fee waived again in a few days. 

What if you’re unable or unwilling to spend more on your card to get your fee waived? You can try sending in an appeal if your request is denied. 

If your appeal is denied, you may then choose to pay the fee and keep the card or cancel your card and re-apply for it sometime later, perhaps when there’s a particularly attractive welcome offer. 

See also: Reasons To Cancel Credit Card And How To Do Just That

Interest charges 

Interest charges are levied on your credit card account when you fail to pay off your statement in full. 

Once past the statement due date, any outstanding balance amount is charged interest based on the credit card’s prevailing interest rate – averaging around 28% per annum – and pro-rated for the month.

This amount is then added to your outstanding balance, to be cleared by the next billing cycle. Failing to do so will result in another round of interest charges levied on the outstanding balance, further increasing the amount owed. 

How to avoid interest charges on credit cards

Don’t carry a balance

The best way to avoid interest charges is to limit your spending to how much you can pay off by the end of the month. 

Before you use your credit card, work out how much you can afford to spend every month, and deduct 10% as a safety margin. Then, track your spending using your mobile banking app – or even a pen and paper ledger – and make sure not to exceed your budget. 

Split up your balance into instalments

If you need to purchase a big ticket item, such as a refrigerator or air-con system, try using your credit card’s instalment payment facility to split up your purchase over several instalments for more manageable payments each month. 

Doing so will cause your credit card balance to be reduced by the total amount and restored as you pay your instalments month by month. You will also not earn any rewards such as air miles or cashback on purchases made on instalments, but at least you won’t have to cough up extra for interest charges.

See also: 6 Things About 0% Interest Credit Card Instalment Plans

Late fees

Not paying your credit card bill in full on time will also incur a late fee. This is pegged at around S$100 per event and will be added to your total outstanding balance for the next billing cycle. 

This means that by the next cycle, interest will be charged on this S$100 if you do not pay your credit card bill off, causing your debt to start snowballing!

How to avoid late fees

Since the condition for triggering late fees is the same as for interest charges, you can use the same tips to avoid them.

In short, always pay off your credit card bill in full and before the due date.

See also: 5 Hacks to Avoid Expensive Credit Card Late Payment Fees

Cash advance fee 

The balance in your credit card may be withdrawn in cash, effectively turning into a short-term cash loan from your credit card issuer. This is known as a cash advance, and the amount taken will be charged to your credit card bill. 

While this might be a convenient option in a pinch – for instance, if you need cash overseas and can’t find a machine that works with your ATM or debit card – be aware that the amount withdrawn will be subject to interest charges (see above) if not repaid in time. 

Also, when you perform a cash advance, you will be charged a cash advance fee for the service, equivalent to around 8% of the amount withdrawn or a minimum of S$15. 

How to avoid cash advance fee

Given the high costs of a credit card cash advance and the potential for interest charges, it is not a recommended method for getting the cash you need. 

Instead, consider applying for a personal loan for lower interest rates and a longer loan tenure (between one to seven years) to more comfortably pay off your borrowings.

Foreign currency transaction fee

When you use your credit card to make purchases in another country, or pay in a foreign currency, your transaction will be subject to a foreign currency transaction fee. This fee is made up of a charge levied by your bank, as well as the payment network provider (VISA, Mastercard, American Express, etc). 

Foreign currency transaction fees hover around 3%. Here’s how much card issuers in Singapore charge for foreign currency transactions. 

How to avoid foreign transaction fees

Pair your credit card with the Instarem amaze card

The amaze card is a multi-currency debit card that has the unique ability to link a Mastercard credit card. It also does not incur foreign currency transaction charges. 

What this means for you is that you can pay for your foreign currency transaction from your linked card, while avoiding the 3.25% foreign currency conversion fee. 

Choose a credit card with high rewards on foreign currency spends

If you’re unable to avoid paying the foreign currency transaction fee, you can try to offset it with high credit card rewards. 

One good candidate is the UOB PRVI Miles, which awards 2.4 miles per dollar for overseas purchases. Because your miles rewards are earned on the entire transaction amount (in S$5 blocks), you can claw back some value from the extra fees as well, and not just the original cost of the purchase.

Frequently Asked Questions (FAQs)

How much are credit card fees on average?

There are a few fees and charges to look out for when using credit cards. Two of the major ones are annual fees, and interest charges. 

Annual fees are charged upon reaching the anniversary of your card membership, and typically ranges from around S$200 for entry level cards, and up to S$600 for premium cards. There are a few credit cards in Singapore that do not charge annual fees, while those that do often offer waivers for the first year or two, or when you fulfil annual spending requirements. You can request for waivers of annual fees by contacting your bank. 

Meanwhile, interest charges are levied on overdue balances in your credit card statement, according to the interest rate on your credit card. There will also be a late charge applied. Note that both of these charges are added to your statement and will compound until paid off. 

How to avoid paying credit card annual fees?

To avoid paying credit card fees, you can apply for cards with no annual fees; only use the card during its annual fee-waiver period; fulfil the spending requirement to qualify for annual fee waiver (if available); or simply contact your card issuer to request for a waiver. 

Why are credit card fees so high?

Credit cards offer several rewards, perks and privileges in exchange for a membership fee charged annually. 

This annual fee varies according to the reward-earning rate and the level of privileges offered, with high-end cards that provide luxurious benefits having annual fees costing several hundred a year. 

Meanwhile, credit cards targeted at the mass market are often reasonably priced, considering you can get back higher value in rewards, discounts and deals.