A credit card transaction fee is a charge that is billed to consumers for using certain benefits or services. These incurred expenses are stated within the terms of the service contract that was signed by the card holder when establishing a relationship with the lender, and these fees can greatly vary between providers. For example, high-risk credit card companies sometimes implement a monthly credit card transaction fee just for having the line of credit, while others will only charge these types of expenses when a certain type of transaction occurs. Other types of credit card transaction fees may originate from paying a bill over the telephone or the Internet, receiving cash from an automated teller machine (ATM) or any other type of service that grants an added convenience to consumers.
Many express frustration when it comes to paying a credit card transaction fee, and more often than not, the added expense was incurred simply because the consumer did not familiarize himself with the terms of the agreement before accepting the charge card. It is essential that credit card users spend ample time reviewing the terms and conditions section of any credit offer, because by law, each of these miscellaneous fees has to be stated in writing in order to be applicable. The only time lending institutions can implement new credit card transaction fees with existing customers is through written notice, but even then, consumers have the option to “opt out” of the change to the contract. In this situation, the consumer’s credit line would be canceled and he would be allowed to pay off any remaining balance under the original terms.
Those with excellent credit histories can normally find lines of financing that do not contain a credit card transaction fee for most of their common daily uses, but consumers with average or poor credit are often faced with many additional penalties. For example, there are some providers that will grant a minimal amount of credit to almost anyone, but the fine print reveals that there are multiple credit card transaction fees that could add up to hundreds of US Dollars (USD) per year. Other credit offers designed for those with low credit scores may have limited fees, but extremely high interest rates, so it is very important to verify the overall cost of doing business with each particular lender.
Sometimes businesses also charge a credit card transaction fee to offset the costs incurred by the transaction. Many government and utility companies will collect an extra percentage of the sale price when credit cards are used, while others will implement a flat fee regardless of the transaction amount. By law, these fees must be posted by the business so that the consumer has knowledge of the extra cost before the transaction has completed, but unfortunately, that is not always the case. While most credit card transaction fees of this type are avoidable, many vendors charge them to all of their customers regardless of the situation, even when paid with currency.