The Hidden Fees You Need to Know About Cashback Credit Cards

Cashback credit cards are popular among consumers, as they offer rewards in the form of cashback for making purchases. 

However, many people overlook the hidden fees associated with these cards. In this article, we’ll explore the various hidden fees you need to be aware of when using a credit card for cashback.

Annual Fees

One of the most common hidden fees associated with cashback credit cards is the annual fee. Most cashback credit cards require an annual fee, which can range from a few dollars to several hundred dollars. The annual fee may be waived for the first year as a sign-up bonus, but it’s important to read the fine print to ensure you understand when the fee will kick in.

If you’re considering a cashback credit card with an annual fee, it’s important to do the math to ensure the rewards you’ll earn will offset the cost of the annual fee. If you don’t plan to use the credit card frequently or take advantage of the rewards program, it may not be worth paying the annual fee.

Foreign Transaction Fees

If you plan to use your cashback credit card while traveling internationally, it’s important to be aware of foreign transaction fees. Most cashback credit cards charge a fee for using the card outside of the United States. These fees can range from 1-3% of the transaction amount.

To avoid foreign transaction fees, consider using a travel credit card that’s designed for international use. These cards often don’t charge foreign transaction fees and may offer additional travel-related benefits, such as travel insurance and airport lounge access.

Credit Card Bill Payment Fees

Another hidden fee to watch out for is the credit card bill payment fee. Some cashback credit cards charge a fee for making payments over the phone or mailing in a check. This fee can range from $5-10 per payment.

To avoid fees on credit card bill payment, set up automatic payments online or via the credit card company’s mobile app. This will ensure your bill is paid on time and you won’t incur any additional fees.

Late Payment Fees

Making a late payment on your cashback credit card can be costly. Late payment fees typically range from $25-35 per occurrence. Late payments can also impact your credit score, making it harder to get approved for loans and credit in the future.

To avoid late payment fees, set up automatic payments or reminders to ensure you pay your bill on time. If you do miss a payment, contact your credit card company as soon as possible to discuss your options and possibly avoid the late fee.

Balance Transfer Fees

If you’re considering using a cashback credit card to transfer a balance from another credit card, be aware of balance transfer fees. Many cashback credit cards charge a fee for balance transfers, which is typically a percentage of the transfer amount.

Balance transfer fees can be as high as 5% of the transfer amount, which can add up quickly if you’re transferring a large balance. If you’re considering a balance transfer, be sure to evaluate the fees and the interest rate on the new credit card to ensure it’s a worthwhile investment.

Cash Advance Fees

Using your cashback credit card for a cash advance can be tempting, but it’s important to be aware of the fees involved. Cash advance fees are typically a percentage of the cash advance amount, which can range from 2-5%.

In addition to the cash advance fee, there’s also typically a higher interest rate for cash advances than for purchases. This means you’ll be paying more in interest for the cash advance than you would for a regular purchase.

To avoid cash advance fees, only use your cashback credit card for purchases and avoid using it for cash advances.


Cashback credit cards can be a great way to earn rewards for your purchases, but it’s important to be aware of the hidden fees that may come with these cards. Review the terms and conditions carefully before applying for a cashback credit card and be sure to read the fine print to understand the fees and requirements associated with the card.

By being aware of the hidden fees associated with cashback credit cards, you can make an informed decision about which credit card is right for you and avoid unnecessary fees and charges.