7 Fees and Charges to Avoid with Small Business Credit Cards

Like all credit cards, small business credit cards can impose a range of fees that can be costly to your business. The key to making the best use of these cards is to minimize or even eliminate the fees you pay. Read on to find out the seven fees and other charges that you could have to pay to your small business credit card issuer, and how you can avoid them.


Small business credit cards can be a very powerful tool for your company. Not only are they a secure and convenient method of payment, but there’s virtually no limit to the number of rewards that you can earn, and benefits that you can enjoy. But all of these perks can come with a cost.

Like all credit cards, small business credit cards can impose a range of fees that can be costly to your business. The key to making the best use of these cards is to minimize or even eliminate the fees you pay.

Here are seven fees and other charges that you could have to pay to your small business credit card issuer, and how you can avoid them.

1. Late Payment Fees

Many small business credit cards will impose a $39 late fee if your payment isn’t received by the due date, or if it’s not at least the minimum amount due. Thankfully, there are several steps that you can take to avoid paying this fee.

The easiest thing to do is to set up automatic payments from your card issuer. Most card issuers will allow you to automatically pay the minimum amount, your statement balance, or your entire current balance, each month by the due date. So long as you have the necessary funds in the bank account specified, you can always avoid paying any late fees.

Another way to avoid late fees is to set up automatic payments from your bank account. Finally, nearly all credit card issuers will offer you email and text alerts when you have a payment due. So if you would prefer to manually initiate your payments each month, then at least you can configure reminders.

But inevitably, most credit card issuers will eventually incur a late fee for some reason. If you are otherwise a customer in good standing, then you should contact the card issuer and request that it be waived. Before you do so, you should make the payment. In most cases, credit card issuers will waive an occasional late fee and sometimes even any associated interest charges.

2. Return Payment Fees

These are fees that you can incur whenever you make a payment that is returned for insufficient funds. These can be electronic payments that are drawing on an account that can’t cover the payment, or checks that “bounce.” The best way to avoid these fees is to keep close track of any payments you have sent or scheduled, and the balance of the bank account the payment is coming from. But like late payments, most credit card issuers will waive an occasional return payment fee upon request from a good customer.

3. Foreign Transaction Fees

While late payment and return payment fees can be thought of as penalties for making mistakes, a foreign transaction fee is a junk fee imposed on any purchase that’s processed outside of the United States. Many credit cards still impose a 3% foreign transaction fee, and you can even be charged this fee on a purchase made at home from a foreign company, even if it’s in US Dollars. Since there are no additional costs to processing transactions outside the United States, these fees represent pure profit by the card issuers with no value provided to cardholders.

Thankfully, there’s an easy way to always avoid these fees. As the public becomes more aware of these useless fees, an increasing number of credit cards are being offered without any foreign transaction fees. To find out if a credit card has this or any other fee, you should examine its terms and conditions. Fortunately, card issuers are legally required to list these fees in a standardized, table format, with large type.

4. Annual Fees

When discussing credit cards, few subjects stir as much passion as annual fees. Some people refuse to pay them under any circumstance, and that’s just fine. There are many small business credit cards that don’t have an annual fee, so it’s not a hard fee to avoid. However, it might be worth taking a closer look at the rewards and benefits offered by a premium credit card that has a modest annual fee.

For example, you might be able to save hundreds of dollars in checked baggage fees by having a small business credit card that’s co-branded with an airline. And if you’re able to earn thousands of dollars in points, miles, and cash back by having a card with an annual fee, then you can think of that fee as being a reasonable business expense. However, you might have some luck contacting your credit card issuer and requesting to have your annual fee waived. There’s no guarantee it will work, but it can’t hurt to ask.

Recommended: Read our guide, Should You Pay an Annual Fee for a Small Business Credit Credit Card? for more information.

5. Balance Transfer Fees

Nearly all credit cards allow you to transfer a balance from another account with a different card issuer. This can be a smart move when you are able to move your balance to a card with a lower interest rate. Better yet, some small business credit cards can offer new applicants 0% APR financing on balance transfers for as long as 15 months. However, you’ll always have to pay a balance transfer fee of 3% - 5% of the amount transferred.

Unfortunately, there’s really no way to avoid paying this fee if you want to perform a credit card balance transfer to your small business credit card. However, there are some personal credit cards that don’t have a balance transfer fee for promotional financing offers.

Without the ability to perform balance transfer to a small business credit card and avoid this fee, the next best strategy is to minimize it. Look for cards with a 3% balance transfer fee, which is 40% less than a 5% fee. Just transfer as little as necessary, and pay off the rest to take advantage of the lower interest rate and avoid the fee.

6. Interest Charges

Interest charges have the potential for being the most expensive part of using a small business credit card, but you don’t have to pay them. By paying each month’s statement balance in full, before the due date, you can avoid all small business credit card interest charges. Small business credit cards happen to be a poor way of financing your company. You’re better off seeking lower interest rates and a higher line of credit with a small business loan or line of credit if you need to make purchases that extend beyond your available capital.

7. Cash Advance Fees

Cash advance fees are perhaps the least necessary and most avoidable fee there is on a small business credit card. Many cards charge a cash advance fee of either $15 or 5% of the amount of each transaction, whichever is greater. Furthermore, cash advances from your credit card are usually subject to a higher, cash advance APR. And to make matters worse, you can’t avoid these interest charges by paying your balance in full, as you can with ordinary purchases.

Simply put, you should never use your small business credit card to access cash from an ATM. In fact, the smartest thing to do is to contact your card issuer and ask that your cash advance limit be set to zero, so you can never inadvertently make a purchase that’s treated as a cash advance.

Bottom Line

By knowing about these common fees imposed on small business credit cards, and how to avoid them, you can gain the maximum benefit from your cards, with the minimum costs.

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