Avoiding the Hidden Fees of Credit Cards

Credit card fees rarely wreck a budget all at once. Instead, they tend to chip away at it little by little.

Interest charges, late fees, annual fees, cash advances, and other costs can quietly consume resources that could have been used for saving, giving, or meeting other financial priorities. That’s why wise stewardship includes understanding what your credit cards cost and making sure they’re serving your financial plan rather than working against it.

Proverbs 21:20 says, “Precious treasure and oil are in a wise man's dwelling, but a foolish man devours it.”

This isn’t a call to hoard what God provides. It’s a reminder that wisdom pays attention. Good stewardship means knowing where our money is going and refusing to let avoidable expenses unnecessarily consume what God has entrusted to us.

Start With the Biggest Cost: Interest

Technically, interest isn’t a fee, but for anyone carrying a credit card balance, it’s usually far more expensive than the other charges associated with a card.

When interest rates are high, reward points and cash-back offers quickly lose their appeal. A few dollars in rewards can’t compensate for months of interest on an unpaid balance.

The best practice is straightforward: Don’t charge more than you can afford to pay off when the bill comes due.

If you’re already carrying a balance, consider putting the card away while you develop a plan to eliminate the debt. Continuing to add new purchases while trying to pay down old ones can make progress much more difficult.

Avoid Late and Returned-Payment Fees

Late fees vary by card issuer, so review your cardholder agreement and know exactly when your payment is due.

Payment alerts and automatic payments can be helpful safeguards. At minimum, consider automating the required payment so an overlooked due date doesn’t create another unnecessary expense. Ideally, pay the full statement balance each month so you avoid interest altogether.

If you use automatic payments, however, make sure there’s enough money in your checking account when the payment is scheduled. A returned payment may result in a fee from the card issuer and possibly another fee from your bank.

Keeping a small cushion in checking can help protect against those surprises.

Think Twice About Annual Fees

Some credit cards have no annual fee, while others charge hundreds of dollars in exchange for travel benefits, rewards, or other perks.

In many cases, avoiding an annual fee altogether is the simpler choice. The benefits may not justify the cost, especially if rewards encourage you to spend more than you otherwise would.

The goal isn’t to maximize points. It’s to make wise decisions with the resources God has provided.

For responsible credit users who want their financial tools to reflect their values, FaithFi appreciates AdelFi Christian Banking. Formed through the merger of Christian Community Credit Union and AdelFi Credit Union, AdelFi provides purpose-driven banking solutions designed to help Christians align their finances with their faith.

Since 1995, AdelFi members’ card activity has generated more than $6.9 million for Christian causes. You can learn more at FaithFi.com/Banking.

Be Especially Careful With Cash Advances

Cash advances are one of the most expensive ways to borrow.

They may include an upfront fee, and unlike ordinary purchases, interest often begins accruing immediately. That makes a cash advance a costly solution to a short-term cash-flow problem.

A better long-term approach is to build financial margin. Start with a small emergency fund, then work toward a larger reserve over time. Having cash available for unexpected expenses can help keep a financial setback from turning into high-interest credit card debt.

Watch for Foreign Transaction Fees

If you travel internationally or make purchases from foreign merchants, check whether your card charges a foreign transaction fee.

Some cards charge a percentage of each transaction, while others waive these fees entirely. Knowing your card’s policy before traveling can help prevent unnecessary surprises.

Review Your Statements Every Month

One of the simplest financial habits is also one of the most valuable: review every credit card statement.

Look for unexpected fees, forgotten subscriptions, duplicate charges, or transactions you don’t recognize. Regularly reviewing your statements helps you catch problems early and stay engaged with your financial life.

It also gives you an opportunity to ask a larger question: Is this card still helping me accomplish what I intended it to?

A Credit Card Should Be a Tool, Not a Master

Credit cards aren’t inherently good or bad. What matters is whether they help or hinder faithful stewardship.

If using a credit card consistently leads to interest charges, fees, or overspending, the wisest decision may be to stop using it. There’s no spiritual virtue in having a credit card, and there’s no shame in choosing cash or debit if those tools help you manage money more faithfully.

Faithfulness often shows up in small financial decisions: paying bills on time, avoiding unnecessary costs, living within God’s provision, and directing more of what He has entrusted to us toward His purposes.

Take a few minutes this week to review the credit cards you use. Know what they cost. Know why you have them. And make sure they’re serving your financial plan rather than quietly shaping it.

If you’re looking for a financial institution that shares your Christian values, consider AdelFi Christian Banking. FaithFi listeners can earn up to a $400 bonus when opening a qualifying high-yield checking or savings account or a Cash Rewards Visa credit account. Visit FaithFi.com/Banking and use the code FAITHFI to learn more.

On Today’s Program, Rob Answers Listener Questions:

• I have investments, but I don’t have a tax-planning strategy, and I’m paying a lot in taxes each year. My advisor doesn’t seem very proactive. How can I find someone who can coordinate my investment and tax planning?
• I’m 67, debt-free, have a good income, and about $97,000 in savings and cash, but no retirement plan or investments through work. How should I start investing at this stage of life?

Resources Mentioned:

• Faithful Steward: FaithFi’s Quarterly Magazine (Become a FaithFi Partner)
• AdelFi Christian Banking
• FaithFi Field Guide: How Much Money is Enough? 
• Our Ultimate Treasure: A 21-Day Journey to Faithful Stewardship by Rob West
• Wisdom Over Wealth: 12 Lessons from Ecclesiastes on Money
• Look At The Sparrows: A 21-Day Devotional on Financial Fear and Anxiety
• Rich Toward God: A Study on the Parable of the Rich Fool
• Find a Certified Kingdom Advisor® (CKA)
• FaithFi App

Remember, you can call in to ask your questions every weekday at (800) 525-7000. Faith & Finance is also available on Moody Radio Network and American Family Radio. You can also visit FaithFi.com to connect with our online community and partner with us as we help more people live as faithful stewards of God’s resources.

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