Avoiding Credit Card Fees: A Smart Teen’s Guide
Credit cards can feel like a ticket to freedom—but they can also sneak in fees that drain your money fast. From late payments to foreign transaction charges, these costs add up before you even realise what’s happening.
If you're a teen learning to manage your money, understanding how to avoid credit card fees is a major win. It means keeping more of your cash and building smart habits early on.
This guide will show you what fees to watch out for—and how to steer clear of them like a pro.
Common Types Of Credit Card Fees
Let’s break down the most common fees and how you can dodge them:
1. Late Payment Fee
What it is: A fee charged when you don’t make at least the minimum payment by your due date.
Average cost: £12–£25.
How to avoid it:
Set up payment reminders or automatic payments.
Try to pay your balance in full every month.
If it’s your first time being late, call your provider—they might waive the fee.
2. Interest Charges (a.k.a. APR)
What it is: Extra money you pay for carrying a balance from month to month.
Average cost: Varies, often 20%+ per year.
How to avoid it:
Pay your balance in full each month.
Don’t spend more than you can afford to repay right away.
Avoid using credit cards as a backup for emergencies if you don’t have savings.
3. Overlimit Fee (less common now, but still possible)
What it is: A charge for going over your credit limit.
Average cost: £12–£30.
How to avoid it:
Keep track of your spending with an app or text alerts.
Don’t treat your credit limit as “free money”—it’s a maximum, not a goal.
4. Cash Advance Fee
What it is: A fee charged when you take out cash using your credit card (like from an ATM).
Average cost: 2%–5% of the amount withdrawn, plus instant interest.
How to avoid it:
Never use your credit card for cash unless it’s a true emergency.
Use a debit card for cash withdrawals instead.
5. Foreign Transaction Fees
What it is: A fee for using your credit card abroad or online with international retailers.
Average cost: Around 3% per transaction.
How to avoid it:
Use a credit card that offers no foreign transaction fees.
If shopping online, make sure the site charges in your local currency.
6. Returned Payment Fee
What it is: A charge if your payment bounces (e.g., insufficient funds in your account).
Average cost: £12–£20.
How to avoid it:
Always check your bank balance before making a payment.
Set up alerts for low balances to avoid overdrafts.
Smart Habits To Stay Fee-Free
Even if you’re just starting out with credit, these habits can help you avoid nasty surprises:
Pay on time—every time.
Track your spending weekly.
Use only what you can repay.
Read the fine print on your credit card terms.
Set up alerts for due dates, spending limits, and unusual activity.
Final Thought
Avoiding credit card fees isn’t about being perfect—it’s about being informed and prepared. These small charges may not seem like a big deal now, but over time, they can drain your bank account and damage your credit score.
Using your card wisely means you stay in control—not the bank. Learn the rules now, build solid habits, and your future self will seriously thank you.
If you use it responsibly, a student credit card could help you manage your money while you’re at college or university. It’s also a way to start building up a good credit score. Read our guide on what you need to know before you apply.
