One of the most unsavory entries you can see on your month-end credit card statement is a credit card penalty fee. Why? Because, along with being charged a high rate of interest on the penalty, the fee is totally unnecessary if you manage your debt repayment properly.

Nonetheless, with many of us having numerous creditors to repay each month, including possibly several credit card companies, the chance are that at some point you will be charged a penalty for your credit card usage. As such, getting to know your issuers penalty policy is essential.

In this regard, each card provider will normally have a different penalty policy; so, without a careful review of the card agreement between you and the provider, it is difficult to say exactly what penalties you may be subject to. The following, however, are some of the industry standard fees you should keep in mind:

Late Payment Fee:

the most obvious fee is the late payment fee. This fee is levied against you if you fail to pay your minimum repayment amount on the statement payment date. You should note that no excuse is accepted for late payment and the fee will stand if you repay late. Also, two types of late payment fee are levied by card providers. The first is a fixed fee, the second is a percentage fee payable on the amount of your outstanding balance on the date of late payment. Typically the former is more industry standard than the latter.

ATM fee:

although not all companies charge an ATM withdrawal fee, these days a large number do. As such, if you plan to use the ATM to make a withdrawal on your credit card, be forewarned that you’ll likely incur a charge for this ‘service’. Again, the ATM fee can be a fixed fee or a percentage fee on the amount you withdraw from the ATM.

out of area fee:

these days most credit card companies will charge a fee on any purchase or ATM use outside of your ‘home’ area. This can be applied to any use in foreign companies. Again, this is normally a fixed fee up to a threshold amount, when the fee becomes a percentage of your purchase. In real terms, this can be a costly ‘extra’ to any credit card purchase you make.

The above credit card penalties are exclusive of any penalty interest that may be charged in appropriate circumstances, so when reviewing your card agreement, ensure that you not only take note of the circumstances in which you may be charged a penalty, but also when any penalty interest may be applicable.