How to beat the worst credit card fees

You may not realize that for every type of annoying credit card fee out there, there exists a card that doesn't charge one (or all) of them.  Annual fees are easily avoidable (only about 5 percent of cards charge them), and overlimit fees, which used to be a big problem, were taken care of by the federal Credit Card Act of 2009. (If you still have the displeasure of being hit with overlimit fees, contact your card issuer and opt out of the right to charge beyond your credit limit.)

But if your problem is just paying the minimum amount due on time, or being assessed currency conversion fees when you use your card overseas, you can in fact find a card that doesn't have such charges. Some cards are nearly fee-free. The PenFed Promise card, from the Pentagon Federal Credit Union, charges no fees and has no penalty APR—the higher interest rate you can be charged after just one late payment. The Citi Simplicity has no annual fee, late fees, or penalty APR either (although it does charge cash advance, foreign transaction, and balance transfer fees).

So, if you find yourself regularly paying some fees, here's the rundown on five common indiscretions cards penalize for and the handful of cards that mercifully don't charge them.

Late fees

Fees for paying your bill late typically run $15 to $35 for each infraction. The Citi Simplicity and PenFed Promise are the only two cards that don't ever charge them. The Discover IT gives you one get out of jail free card on late fees, then it's $35 a pop afterward. Important to note: Late payments may still be reported to credit bureaus, bringing down your score. And though these cards don't charge late fees, a pattern of late payments would likely lead to the closing of your credit card.

Foreign transaction fees

These currency conversion fees are typically 3 percent of anything you buy overseas. But they may also apply to items bought on a foreign website from within the U.S., including bookings on foreign airline or travel agent websites. Capital One, Discover, and the Pentagon Federal Credit Union are the only card issuers to waive foreign transaction fees across all of their cards.  

Several individual travel cards—airline-branded cards and general bank travel cards, such as Capital One Venture—waive foreign transaction fees. But travel cards can have multiple iterations, with a basic version that charges foreign fees, and a premium version (often featuring annual fees) that doesn't. For example, the Chase Sapphire Preferred card, which gives two points for every dollar spent on travel, charges no foreign transaction fee, but the basic Chase Sapphire charges a 3 percent fee. The Citi Platinum Select American Airlines card has a 3 percent annual fee, while the Citi Executive American Airlines card has no foreign fee.

The Discover IT card and some Amex cards don't charge foreign conversion fees, but their acceptance overseas is limited compared with MasterCard or Visa cards.

Balance transfer fees

Nowadays most cards charge a fee of 3 percent or more when you want to roll over a balance to a new card to take advantage of a lower interest rate. So, if you transfer a $5,000 balance, you'll pay $150 right off the bat, assuming that 3 percent fee.

One of the few good balance transfer cards left is the Chase Slate card. It's offering 0 percent for 15 months on transfers (and purchases) with no transfer fee, provided you transfer a balance within 60 days of opening your account. But after the introductory period, your APR will jump to 12.99 percent, 17.99 percent, or 22.99 percent, depending on your creditworthiness.

So, if you can't pay off your card in two years, choose one of several Pentagon Federal Credit Union cards offering a 4.99 percent APR promotional balance transfer rate on transfers through Sept. 30, 2013 (PenFed typically renews this offer), for the life of the balance with no balance transfer fee. Credit cards offered by Simmons First Bank don't charge balance transfer fees.

Cash-advance fees

The PenFed Promise Visa and PenFed Defender cards don't charge cash-advance fees. With any other cards, expect to pay a balance transfer fee of 5 percent, and a higher interest rate than the card's purchase APR—up to 25 percent is common.

Penalty APRs

The worst penalty APRs—also called default APRs—can be upward of 30 percent, and you can land in the penalty box for just a single late payment, or if your card payment bounces. The Discover IT card and cards offered by Simmons First Bank and Iberia Bank don't have penalty APRs.

For more on how to pick a credit card, see our Credit Card Buying Guide. 

- Chris Fichera