Typically, balance transfer fees are expressed as a percentage of the amount transferred. In our survey, the most prevalent fee was 3 percent, though minimums and maximums varied. Five cards charged a 4 percent fee with no maximum. On the lower end, 58 percent of the cards -- most of them issued by credit unions -- charged nothing for a balance transfer, which is consistent with the 55 percent of cards from our 2010 survey that didn't charge the fee.
Foreign transactions fees are common
If you're heading overseas or doing some shopping with a foreign retailer, you might want to compare the fees on your credit cards for currency conversion.
In Bankrate's survey, a foreign transaction fee of 1 percent or 3 percent were the most common amounts charged, with 30 percent charging 1 percent and another 30 percent charging 3 percent. Only eight cards didn't charge a fee for foreign purchases.
A current look at secured cards
If you can't qualify for an unsecured card, you might consider a secured credit card. The good news, as the survey revealed, is that there are secured cards out there that charge a reasonable annual fee and no other upfront fees.
In fact, the Credit CARD Act limited excessive upfront fees by requiring that nonpenalty fees assessed during the first year after issuance not exceed 25 percent of the initial credit limit. The Federal Reserve Board later clarified that this restriction also applies to fees charged before the account is opened, such as application or processing fees. Secured cards were among those cards affected, since many of them charge annual fees and some a multitude of other fees.
What can you expect from secured cards in the current environment? According to Bankrate's survey:
- There is no "typical" annual fee. While eight of 15 secured cards charged a yearly fee, the fee ranged from $18 to $40. You'll need to shop around for the lowest fee.
- None of the cards charged an application fee or any other upfront fees.
- All 15 report card activity to the three major credit reporting agencies. The reason for using a secured card is that the issuer reports your monthly payment history to Equifax, Experian and TransUnion, the three major consumer reporting agencies. Responsible use of a secured card can build a good credit score.
- Nearly half require a $500 minimum deposit. The required minimum deposit ranged from $49 to $500, but $500 was the most common. The deposit is money you won't see while the account remains open.
- You usually get what you give. Out of 15 cards, 11 make the credit limit equal to the deposit. For example, a $300 deposit would get you a $300 credit limit.
- Some cards pay interest. Though the yields are paltry, nine of the cards in the survey pay interest on the deposit. The annual percentage yields ranged from 0.05 percent to 1 percent, with 0.10 percent being the most common.
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