WASHINGTON, July 16 (UPI) -- When it comes to shopping for a new credit card, consumers are being warned to look beyond interest rates into an emerging trend from issuers to dig deep into bank accounts.
A survey by CreditCards.com found 99 of 100 credit cards reviewed carry six likely fees, including late payment fees ranging from $10 to $49. Others have even more pitfalls, with the worst offenders having 12 potential fees, including fees for overdraft protection, credit increases and balance transfers.
Analysts say the trend to relying on fees was born out of the recession that changed how consumers use credit and the federal Credit Card Accountability Responsibility and Disclosure Act of 2009, also called the Credit Cardholders' Bill of Rights, which is aimed at limiting abusive credit practices.
"Fees have become much more important as cardholder repayments are up and APRs have been down -- a trend that began several years ago," said Robert Hammer, founder and CEO of bank card advisory firm R.K Hammer. "Many turned to new fees to supplement their income post-regulations. They look and see, 'What can we charge that we don't charge for presently? What is permissible?' What they can charge, they will charge."
The Credit Card Fee Survey, which looked at 100 United States-issued cards, was conducted in June and is considered a representative sampling of cards from all major U.S. card issuers.
Among the findings are the following:
- Three cards -- Discover It, Discover It for Students and Discover It Chrome for Students -- let a cardholder's first lay payment fee slide without a fee.
- After the late fee, the other most-common fees are cash-advance fees (charged by 98 cards), balance-transfer fees (89 cards) and returned-payment fees (81 cards).
- Annual fees are seen on 26 percent of cards surveyed, ranging from $25 to $195.
- Of the 90 cards that allow balance transfers, 80 charge a fee that is typically three percent of the transfer amount. This is up significantly since 2011, when a similar CreditCard.com survey found only 42 percent of cards charge such a fee.
- Of the 100 cards in the survey, 77 had foreign-transaction fees, which is usually three percent of each transaction in U.S. dollars.
- Cash-advance fees are seen in 98 of the 100 cards surveyed, typically $10 or five percent of the advance amount, which ever is greater.
The survey found two cards from First Premier Bank come with 12 fees, while PenFed Promise Visa carries no fees.
"More than anything, this survey proves just how important it is for people to shop around for cards,'' said Matt Schulz, senior industry analyst for CreditCards.com, "because the difference between a card with no fees and a card with nine fees, or 12 fees, is a significant one.''