The Most Common Types of Credit Card Fees and Charges

While it’s possible to use a credit card without paying any fees, most cardholders will run into charges at some point — whether it’s interest, an annual fee, or a fee triggered by how (or where) you use the card.

Below is a roundup of the most common credit card fees and charges in Canada, organized roughly from most costly/common to less common — with a quick “how to avoid it” tip for each.

Interest charges (purchase interest)

Interest is the cost of borrowing on your credit card. If you don’t pay your statement balance in full by the due date, interest is typically charged on the remaining balance.

Most cards offer an interest-free grace period on purchases — but it usually applies only if you paid your previous statement in full, and it generally doesn’t apply to cash advances.

How to avoid it: Pay the full statement balance by the due date (and consider autopay for at least the minimum).

Late payment fees

If you miss your payment due date, your issuer may charge a late payment fee. Late payments can also trigger other consequences, such as losing a promotional rate, having your interest rate increased, or having your account closed.

How to avoid it: Set up autopay (minimum or full balance), calendar reminders, and alerts a few days before the due date.

Cash advance fee (aka cash equivalent fee)

A cash advance is when you use your credit card to withdraw cash or make certain “cash-like” transactions. Most issuers charge a cash advance fee (flat, percentage, or both).

On top of the fee, cash advances often carry a higher interest rate than purchases — and interest typically starts accruing immediately (no grace period).

How to avoid it: Don’t withdraw cash on a credit card. Use a debit card, a line of credit, or plan cash needs ahead of time.

Foreign currency conversion (aka foreign exchange fee)

Many Canadian credit cards charge a foreign currency conversion fee — often around 2.5% — when you buy something in a foreign currency (including online purchases billed in non-CAD).

Depending on the issuer, the fee may appear as a separate line item or be baked into the final posted amount, but it should be disclosed in your cardholder agreement.

How to avoid it: Use a no-FX-fee credit card if you spend in foreign currencies frequently, and pay in local currency when given a choice.

Annual fee

Annual fees are most common on premium cards with rewards (points or cash back) and perks such as insurance, lounge access, or entertainment benefits.

An annual fee can be worth it — but only if you actually use the benefits enough to outweigh the cost.

How to avoid it: Choose a no-fee card, or do a quick annual “benefits check” and downgrade or switch if you’re not getting value.

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Balance transfer fee (and promo fine print)

A balance transfer moves debt from one card to another, often to take advantage of a promotional interest rate. Many cards charge a balance transfer fee, usually a percentage of the amount transferred.

Also watch promo terms: the low rate is often time-limited, may apply only to the transferred balance, and new purchases may not get the same treatment (sometimes they accrue interest right away unless paid immediately).

How to avoid it: Compare transfer fees + the promo period, and consider using the balance-transfer card only for the transfer (not everyday spending) during the promo.

Over-the-limit fees

If you go over your credit limit, your issuer may charge an over-the-limit fee, approve the transaction, or decline it — depending on your card and settings. Temporary authorization holds (like at gas stations or hotels) can also make it look like you’re over the limit even if the final posted amount is lower.

How to avoid it: Enable balance/limit alerts, keep a buffer under your limit, and be cautious with pre-authorizations while traveling.

Returned payment fee (dishonoured / NSF / failed payment)

You may be charged a returned payment fee if a payment to your credit card doesn’t go through — for example, because there aren’t enough funds in the account you’re paying from, your bank information is incorrect, or the payment is rejected for another reason.

Issuers use different labels for this charge, including returned payment, dishonoured payment, or failed payment.

How to avoid it: Pay from an account with a cushion, schedule payments a few days early, and set up low-balance alerts so you can top up before a payment is pulled.

Additional cardholder fee (authorized user / extra card fee)

Some cards charge for additional cards for authorized users (extra cardholders), especially on premium products. This can show up annually or monthly depending on the issuer.

How to avoid it: Check the “additional card” pricing before adding users. If you need multiple cards, compare issuers that include extra cards at no cost.

Paper statement fee and statement reprint fees

Some issuers charge a fee if you opt into paper statements. Others may charge for reprinted statements beyond what’s available online (many issuers provide free access to at least a year of statements digitally).

How to avoid it: Switch to e-statements and download PDFs periodically if you want your own archive.

Optional add-ons (credit insurance / balance protection)

Some accounts include optional products like balance protection or credit insurance that add a monthly premium. Many people don’t notice these charges until they review their statement closely.

How to avoid it: Scan your statement for recurring premiums and confirm whether you opted in. Cancel if it isn’t useful for you.

Inactivity fee

Some issuers charge an inactivity fee if you don’t use your card for a long period (often a year or more). It’s less common, but it can surprise people who keep a backup card “just in case.”

How to avoid it: Make a small purchase occasionally (and pay it off) or close cards you truly don’t need (after considering credit-history impact).

Replacement card fee

If you lose your card, your issuer may charge a replacement fee — though many issuers replace cards at no cost.

How to avoid it: Ask about replacement fees when you open the account, and store issuer contact info so you can quickly lock/replace a lost card.

Merchant surcharge (credit card surcharge)

Some businesses can add a surcharge when you pay with a credit card (Quebec is an exception). This is a merchant-added checkout fee that increases the cost of the purchase.

If a surcharge is applied, it must be disclosed before you pay (for example, at checkout and on your receipt), so you can decide whether to proceed or use another payment method.

How to avoid it: Watch for signage and checkout disclosures, check your receipt, and switch to debit, cash, or another payment method when surcharges apply.

Most fees will be visible on your monthly statement and listed in your credit card agreement (often in a “Disclosure Statement” or fees table). If you’re unsure about a charge: