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Setup Fee |
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A setup fee is a fee that the issuer of a credit card may charge to set up a new credit card account. To find out whether or not an issuer charges this fee, refer to the Terms and Conditions section in the credit card agreement. Find the section describing fees and look for one called Setup fee.
When shopping around for a new credit card, it’s important to familiarize yourself with the various fees you may be charged. Oftentimes there are many including a setup fee which some issuers will one time. Others may be recurring.
A setup fee is charged to cover the administrative costs involved with setting up a new account. The amount of this fee will vary depending on the issuer. This and the other fees associated with a new credit card can really start to add up over time. Therefore, it’s in your best interest to know which fees you will be charged, how much each will cost, and the conditions under which such fees will be charged.
Besides a setup fee, you might find that the credit card has an annual fee, a fee for making late payments, a fee for balance transfers, a fee for going over your credit limit, a cash advance fee, a fee for requesting an increase in your credit limit, and returned item fees (also know as a bounced check fee).
Some issuers impose even more fees. They may charge to forward your credit history to the credit reporting bureaus, or when you transfer funds to the credit card account by telephone, and even to review your account. In fact, any time the issuer has to make an inquiry into your account, you may be charged.
All of the various fees that the issuer will charge, including whether or not there is a setup fee, are all delineated in the credit card agreement pamphlet. Be sure you take time to read through this important document! Don’t make the same mistake others do and disregard it.
Most people evaluate only the interest rate when choosing a new credit card, but there is so much more to consider. If you know that you have a high credit score, you might try renegotiating some of the terms such as requesting that the credit card issuer waive the setup fee. Forgoing a few dollars in setup fees might be worth it in order to get business from a creditworthy customer!
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Credit Card Definitions > N - Z > Setup Fee
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