Credit Cards Credit Card Basics How to Keep Your Credit Card Free By LaToya Irby LaToya Irby LaToya Irby is a credit expert who has been covering credit and debt management for The Balance for more than a dozen years. She's been quoted in USA Today, The Chicago Tribune, and the Associated Press, and her work has been cited in several books. learn about our editorial policies Updated on June 28, 2021 Reviewed by Thomas J. Catalano Reviewed by Thomas J. Catalano Thomas J Catalano is a CFP and Registered Investment Adviser with the state of South Carolina, where he launched his own financial advisory firm in 2018. Thomas' experience gives him expertise in a variety of areas including investments, retirement, insurance, and financial planning. learn about our financial review board Credit card fees and interest can quickly add up if you're not diligent about minimizing your credit card cost. Every dollar you spend on credit card fees is a dollar you could have spent elsewhere. You can use a credit card for free, but it requires you to be aware of all the fees your credit card charges and when they're charged. Follow these seven steps to reduce or eliminate your credit card fees. 01 of 07 Choose a Credit Card With No Annual or Monthly Fees © Peter Cade / The Image Bank / Getty Most credit cards fees can be avoided, but annual fees are the exception. Some credit card issuers waive this yearly cost of having a credit card in the first year your account is opened, however, you may not get that luxury in the second year or any year thereafter. Opting for a credit card that doesn't charge an annual fee is a must if you want to keep your credit card cost at zero. 02 of 07 Make Sure Your Credit Card Has a Grace Period You have a certain amount of time to pay off your full balance and avoid paying interest on your charges. This grace period is your opportunity to avoid finance charges being added to your balance. Be sure your credit card gives you a grace period so you have this window of time to dodge interest charges. Note Some transactions may not receive a grace period. Balance transfers and cash advances, for example, may start accruing interest right away. Without a grace period, you would have to pay off your balance almost instantly to avoid interest. 03 of 07 Always Pay on Time If you're behind on your credit card payment, even by just a few minutes, you'll incur a late fee. The fee would be up to $29 the first time you're late and up to $40 if you're late again within a six-month timeframe. While paying in full is ideal, you only need to pay the minimum payment by the due date to avoid a late fee. But remember, if you want to keep your credit card free, you should send the full balance before the due date so you avoid a late fee and interest. 04 of 07 Stay Under Your Credit Limit Your credit card issuer only makes a certain amount of credit available to you. This is your credit limit, or the maximum amount you can charge without facing a penalty. While some credit card issuers have eliminated credit limit fees—charged when you exceed your credit limit—you should stay under your credit limit unless you're sure your credit card issuer is one of them. Note You can ask your credit card issuer to decline transactions that would push you over your credit limit. While it might be inconvenient, it saves you from going over your credit limit and running up a balance that may be difficult to repay. 05 of 07 Make Sure You Can Cover the Payment If you pay with your checking account, either by sending a physical check or entering your account details online, there should be enough money in your account when your credit card issuer requests payment. Otherwise, a payment returned for insufficient funds will result in a returned check fee that could be as high as $40. Before you write a check for your credit card payment, confirm there will be enough money in your checking account to pay the check even after any pending transactions have gone through. 06 of 07 Avoid Cash Advances and Balance Transfers Unless the bank is offering a promotion, you're automatically charged a fee for cash advances and balance transfers. Since the fee is typically a percentage of the transaction, you could pay heavily for higher transactions amount. Another reason to avoid cash advances—they don't have a grace period. Interest begins accruing on your balance immediately. 07 of 07 Read Your Card Agreement to Learn All Your Fees Credit cards can come with other fees, like a credit limit increase fee that’s charged when you request a credit limit increase. The best way to learn which fees your credit card charges is to read the credit card disclosure included with the credit card application or your credit card agreement. Familiarizing yourself with your various credit card fees puts you in the best position to tailor your credit card usage so you keep your credit card free. Was this page helpful? Thanks for your feedback! Tell us why! Other Submit Sources The Balance uses only high-quality sources, including peer-reviewed studies, to support the facts within our articles. Read our editorial process to learn more about how we fact-check and keep our content accurate, reliable, and trustworthy. Consumer Financial Protection Bureau. "What is a Grace Period for a Credit Card?" Capital One. "Tips to Avoid Late Payment Fees." Experian. "What is a Credit Limit?" American Express. "What Happens if My Payment is Returned for Insufficient or Uncollected Funds?"