8 Credit Card Fees to Avoid to Build Your Credit Score

When you sign up for a credit card, you may think you're stuck with all the provisions you agreed to. But this is not necessarily true, as you can get a lower interest rate through a refinance or balance transfer. If you decide to get your card refinanced or change a few other things that were outlined in your credit card contract, you'll have to pay a fee. These extra charges for maintenance can take a toll on your credit card balance, but there are multiple ones that you can avoid. Bypassing some of these will not only help the state of your credit card debt, but it can also contribute to keeping your credit score in a good place. Here are a few credit card fees and how you can avoid them:

Application fee
As you sign up for a credit card, your lender will need a copy of your credit report. This will cost a few extra bucks, and the lender may charge you for processing the application. This type of fee is starting to become obsolete, as fewer lenders and credit card companies will be charging for application processing. But there are still some companies out there that put this payment in card contracts. To bypass this, repair your credit score and apply for a new card with another company that does not deal with processing charges.

Annual fee
This fee occurs annually to take care of customer service charges, rewards programs and any other account maintenance. There are card offers for lower annual fees that you can look into. Also, see if your card company will cut them down if you continue to make payments on time.

Balance transfer
Taking your balance to another account is helpful if you'd like to lower your interest rate, but you will be charged a fee that is a percentage of your current balance. Many lenders offer you a brief period of time where there will be 0 percent interest for transfers, but once this offer is over, you'll accrue interest. Think about whether this transfer is worth it depending on what your new rate will be. If you go through with it, make sure you pay off your card before the interest starts accruing.

Purchase fees
When you use your card, this small fee will be charged to recover the processing costs of the payment. These are generally reserved for retail credit cards, so you should think hard if you are going to apply for a store credit card. The recommended route in this situation is to forego the department and retail store cards. If you don't sign up for one, you could save more money and not have to worry about raising your credit-utilization ratio.

Cash advance
A credit card is best to be used in emergencies, such as when you need to pay for a car repair or get a meal if you left your lunch at home. Another emergency function of your credit card is the cash advance option. If you're in a pinch and need a few bucks, you can withdraw money from your credit account but will be charged a fee that is a few percentage points of your balance. And if you have a high balance, this fee could be large. Limiting your spending can help you build healthy credit, but if you're constantly using the cash advance option, you could run up your balance and get a bad credit score. Avoid this and instead get emergency cash from your savings. If you don't have one of these savings accounts, start one as soon as possible.

Late payment
You will be given a late fee for failing to make your credit card payment on time. This type of fee can hurt your score in a number of ways, as it will make paying your balance more difficult, and your score will drop a few points. If you want to avoid this fee, try setting up a payment reminder on your phone's calendar or enroll in automatic payments with your credit card company.

Over-the-limit charge
When you see your credit card limit, that does not mean you have free reign to spend whatever you want. In fact, this limit should be a warning sign, and you should try to keep your balance as low as possible. If you spend more than you're allowed, you could get an over-the-limit fee, and your credit-utilization ratio will rise, hurting your credit score. Keep on top of your credit card payments and make larger payments each month to keep your balance down.

Returned payment
Enrolling in automatic payments for your student loan or credit card can help you stay on top of your finances and avoid late fees, but if you don't have enough money in your account, the transaction will be returned and you'll be charged a fee for not having sufficient funds.