Credit Card Account set up fees

Some credit cards charge account set up fees.  The account set up fee is when a credit card issuer charges a fee to set up a credit card account.  This is usually designed to cover the administration and other set up costs such as checking the applicant’s credit score.

Account set up fees used to be more common than they are today.  This is mainly because the credit card market has become more competitive in the past few years.  Credit card account set up fees do not tend to be payable when there is a competitive market in that credit card market.  This does not just include standard credit cards, but also silver and some gold cards as well as low rate interest cards.

A credit card issuer will start to charge account set up fees when there is less competition in the particular market.  This can include secured credit cards, prestige cards and cards for people with poor credit ratings.

An account set up fee is rarely included on the advertised interest rates. These fees need to be added into any decision on whether a credit card is worth taking out.  The set up fees will not be charged in cash, but are added on the balance of the card.  As they are added on to the credit card they are not noticed by many credit card customers.  They will always be included in the terms and conditions within any advertisements, but are rarely as prominently advertised as the interest rate or acceptance conditions.  Other fees that are charged at the beginning of the account include the annual fees charged in advance and the balance transfer fees.

One of the more common cards that will have set up fees are the cards that are available to people with a poor credit history.  This can often include cards that are advertised as a way to repair a credit rating.

Secured credit cards, which are secured on either money in a savings account or on a residential property, are also likely to charge a setup fee.  This is partly because the card does really have a high set up cost as it is arranges to secure the debt over the credit card.  These cards are often a way for people with poor credit to repair their credit history.

Prestige credit cards, such as platinum and black cards, also charge set up fees, although these sometimes go under other names such as “initiation fees”.