The Sneaky Credit Card Fees That Banks Try to Hide

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Credit cards can be immensely helpful, but at the same time they can cost us a hell of a lot of money. We’re not just talking about the interest rates and how long it’ll take you to pay the card balance when you only make the minimum payment each month, either (we’ll look at those later so you can add those on too!). Instead, we’re looking at those sneaky yet often expensive credit card fees that are often for the most seemingly trivial things. Even when these fees aren’t expensive you’re really being tricked. A few dollars a month here and there might not seem too much, but if you’re a minimum payment merchant and it takes you years to clear your balance, you could easily end up paying thousands of dollars in these payments on top of the money you’ve spent as well as all the interest.

While 2016 saw companies banned from charging what was legislatively termed as “excessive” credit card fees when booking tickets for a flight or a concert ticket, you’re still likely to be paying money to the bank by other means.

Here’s a look at some of the fees you might not be aware of, or that may sting you when you need to use your credit card the most.

Annual Fees

Analysis conducted by Canstar, the popular comparison site, highlighted that out of 197 credit cards available in Australia, only 36 of them don’t charge an annual fee.

Across Australia, annual credit card fees can be as much as $700. What really sticks in the throat for many Aussies is that it’s the reward credit cards – where you collect cashback, air miles, or points towards something else – that usually have the highest fees.

Make the most of all the cashback you receive on your purchases; you’ll need it to cover your annual fees!

Annual Fees: Your Second Card

Yes, that’s right, you’re not just paying annual fees on your own credit card, or even the account as a whole. You’re paying an annual fees on the credit card your partner has, too. It doesn’t stop at two cards, either. If you have adult children who are at college away from home and they have an additional card for use in an emergency, you’re paying an additional fee on that, too.

Let’s say you have a card with an annual fee of $500, that’s $2,000 a year for a family of four with both children at college with additional cards before you’ve even started using the card!

Additional annual fees aren’t as common as they used to be, but you should definitely ask the questionbefore you take out those extra cards for your account.

Currency Conversion Fees

If you use your credit card abroad then conversion fees are probably deemed acceptable, and we’d expect to pay those.

The problem with currency conversions can come if:

  • You buy something online from abroad to have it shipped to Australia, but there isn’t an option to pay in Australian dollars
  • Your credit card provider offers a very uncompetitive exchange rate (as they often will) so they can make an additional profit converting back to dollars at a better rate

Cash Advance Fees

This is another area where we think we know about the fees, and in some respects accept them, but we’re not always entirely clued up on what we’re going to end up paying.

Cash advance fees can include:

  • Up to 5% of your withdrawal amount, and a minimum payment regardless of how much you withdraw
  • Potential ATM fees, in addition to additional fees if you use an ATM outside of your bank’s network
  • While you also need to remember that interest on cash advances starts accruing from the day you take out the cash, so you’ll end up paying interest on it even if you pay the full balance of your credit card at the end of the month

The Reserve Bank estimates Australia’s banks makes a staggering $21million a month on cash advance fees and interest.

Make sure you’re doing everything you can to minimize your contribution to this!

Foreign Cash Advances

These fees may be higher than for domestic withdrawals, and you’ll often have no choice but to withdraw from an ATM outside of your bank’s network.

If you’re in an unfamiliar place and just need to get your money quickly, you’ll be at the mercy of whatever fee an ATM is going to charge you, too.

Going Over Your Limit Fees

You have to have given permission to your bank or credit card provider before your card can be allowed to go over its credit limit. Like an overdraft, this can be a useful facility to have, but it’s one you might have to pay for.

Canstar’s credit card database highlights over 95% of credit cards charging a $40 fee for going over the limit.

Unless it’s an emergency, perhaps that thing you need to buy to go over your limit can wait.

Dishonour Fees

For those that pay by direct debit – and many of us do so because there might be a fee if we don’t! – at least 115 of the credit cards available in Australia will charge $2.50 if your payment is unable to be taken. In addition, you may be charged a fee by the bank to your account for the direct debit failure, too.

If your credit card is with the bank you do your personal banking with, you can easily end up paying them twice for the same error. If you’re not someone who checks their bank regularly and you don’t get text message or email alerts from your credit card provider, you can then end up with a late payment mark on your credit file, which could have negative consequences for your hopes of attaining credit in the future.

Check all your credit card payment due dates – they’ll be the same each month – and if they don’t come just after payday or when you receive a CentreLink payment, speak to your provider and get the dates changed. This will ensure you have the cash in the bank to pay your bill and don’t get a dishonor fee on either your credit card or bank account, or a late payment mark on your credit file.

Non-Direct Debit Fee

Some credit cards will charge an administration fee if you don’t pay by direct debit. For those who struggle to manage their finances, they may choose not to pay by direct debit to avoid potential dishonour fees, as explored above.

Work out the best approach for yourself and speak to your credit card provider to ensure you can pay by direct debit on a date convenient to you.

Counter Fees

You don’t pay via direct debit, so you get a charge. If you then pay in person at a bank – let’s say you are unable to access your online banking, for example – you could then be charged again.

This is another fee that is uncommon but can still be found, with $2 being the usual counter fee. As we mentioned earlier, this isn’t a large sum by any stretch of the imagination, but it can quickly add up over time.

BPay Fees

Another small charge only administered by a handful of providers, but another where fees may add up.

Some credit cards will charge you up to 95 cents to pay via BPay.

Paper Statement Fees

In today’s digital world it’s convenient to do everything online for some, but not for others. While your credit card provider will tell you they add a charge if you want a paper statement for environmental reasons, they can go green without charging a few dollars a month for a printed statement.

That said, in the long-run you’ll save money by printing your own statements from your online account, so do this if you do want to keep physical records of your credit card bills.

Replacement Fees

Losing your credit card is stressful enough, particularly as losing one card means we’ve lost our purse or wallet and everything in it. Having to pay a fee of up to $25 to replace your lost card, as around a third of all credit cards do, is just what you need when you’re already stressed out and trying to quickly cancel your cards and protect yourself from potential fraud.

You Know the Costs, Why Pay?

Now you know all these costs are there, it’s time to question whether you even need a credit card at all. The table below highlights the pros and cons of credit cards in comparison to personal loans, and when you might use either product.

Remember that with a personal loan you’re not going to get stuck in the revolving debt cycle; you know how much you have to pay and you have a date you’re going to be debt free, assuming you take on no other debt while repaying the loan. With a credit card you can easily fall into the minimum payment cycle and quickly start to see the interest stack up on top of your balance.

Personal Loans:

Credit Cards:

To get a further idea of the benefits of a personal loan in comparison to a credit card, take a look at the below table that highlights the cost of a credit card if you only pay the minimum amount vs. taking out a personal loan.

As you can see, in addition to the fees you may not know about, it could potentially take you years – perhaps even the rest of your life – to pay all of your credit cards off.

Consider whether a personal loan is the best option for you instead.

When you take out a personal loan with NOW FINANCE, you can get your interest rate before you apply so you’ll know exactly what your payments will be, and when you’ll have paid off the loan and be debt free!

Get your interest rate here and get started with your NOW FINANCE personal loan.


Disclaimer:  This article contains general comments and recommendations only. This article has been prepared without taking account of your objectives, financial situation or needs.  Before taking any action you should consider the appropriateness of the comments made in the article, having regard to your objectives, financial situation and needs. If this article relates to the acquisition, or possible acquisition, of a particular credit product you should obtain and consider the relevant disclosure documents before applying for the product.



Things you should know

Applications for finance are subject to NOW Finance’s lending and approval criteria. Terms and conditions may apply.  No establishment, account keeping or early repayment fees will apply. Charges such as default or enforcement costs may apply if you do not comply with the terms of your loan. Settlement times may vary depending on individual circumstances. Loan repayment terms range between 18 months to 7 years.  For unsecured loans you can borrow between $5,000 to $50,000 with interest rates ranging from 5.95% p.a. (5.95% p.a. comparison rate*) to 17.95% p.a. (17.95% p.a. comparison rate*).  For secured loans you can borrow between $15,000 to $100,000 with interest rates ranging from 4.45%p.a. (4.45% comparison rate*) to 15.45% p.a. (15.45% p.a. comparison rate*).

*About Comparison Rates

The Comparison Rate is designed to help you understand the overall cost of the personal loan. It combines the amount of the loan, loan term, repayment frequency, interest rate, fees and charges into a single rate to show the total true cost of the loan. The comparison rates for the NOW Finance loans are based on a loan of $30,000 over 5 years. WARNING: The comparison rates given are true only for the examples given and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate. Due to the fact NOW Finance does not charge any establishment, account keeping or early repayment fees, the true cost of the loan or Comparison Rate will always equal the interest rate quoted.


our confirmed guaranteed personalised rate may change if you provide NOW Finance with incorrect personal information or security details.  In some circumstances, NOW Finance may require further information from you in order to provide you with your guaranteed personalised rate.

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