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20 Terms You Should Know to Save Money on Credit Card Charges

Moneymax Editorial Team

Moneymax Editorial Team

Last updated May 17, 2022


The convenience of a credit card makes for a more carefree shopping experience. Combined with the surge of online shops, making a purchase has become almost effortless. However, aside from the amount you would need to pay for your purchase, you may have to pay extra credit card fees. Before using your card, you should learn more about its technicalities. Here are some terms you should know that can help you save on credit card charges:

Credit Card Terms You Should Know to Help You Save Money on Credit Card Charges

1. Annual fees

This charge is the amount you pay every year to keep your credit card account open. Annual fees can range from PHP 1,200 to PHP 5,000, depending on your bank. It is usually a one-time credit card charge during a certain month of the year. For example, your bank can charge your annual fee on the date that you got approved for your credit card.

If you have been a loyal customer and have a history of paying the full balance month after month, you may be able to get your annual fees waived. Call your bank and ask whether you qualify for a waived annual fee or not. Additionally, you can opt for a credit card with no annual fee for life.

2. Annual percentage rate (APR)

Also known as the Purchase Annual Percentage rate, APR is the yearly cost you pay for borrowing money on your credit card[1]. For example, if your card’s APR is 15%, you may be charged an additional 1.25% interest rate monthly on top of your outstanding balance. Consider paying your dues within your grace period to avoid paying for APR.

3. Attorney’s fees and liquidated damages

Credit Card Terms to Know to Avoid Credit Card Charges - Attorney's Fees

Photo by via Unsplash



In the event you default on your credit card, you may have to pay for these fees. Such credit card charges will cover you from litigation (the act or process of a lawsuit) and attorney’s fees. It is typically 25% of the amount due for the former, and another 25% for the latter. Keep in mind that these fees are apart from the penalty and interest charges you may incur should you default on your card.

To avoid these fees and a chunk load of headaches, don’t fall behind your payments. Consider making a calendar reminder for your credit card payments and for budgeting your finances to make sure you don’t default on your card.

4. Balance transfer fee

You have to pay for this credit card charge when you transfer your balance from one card to another. You may use this to transfer your balance from a high-interest card to one with lower interest rates, which can help you ease some of your credit card debts.

Some banks offer a 0% transfer rate, but these usually only last for up to six months. After this period ends, you may have to pay a higher interest rate than you bargained for. Before making this move, read the fine print and check all fees involved.

5. Cash advance fee

This is charged every time you withdraw cash from your credit card. In the Philippines, the cash advance fee is 3% to 5% of your withdrawal, or a flat fee if you don’t reach a certain threshold. On top of the cash advance amount, you may be charged with additional interest and service fees when you’re past the due date. There is also an additional fee if you withdraw your cash advance at an ATM of another bank.

While cash advance is an enticing way to get extra money quickly, you may be better off with cheaper alternatives. Consider applying for a personal loan if you need the money for an emergency or any unforeseen expenses.

Read more: How Risky is a Credit Card Cash Advance?

6. Certification fees

These are credit card charges you have to pay when you request for certifications for a settlement account, good credit standing, or card replacement insurance. The fee you have to pay depends on the type of certification you’re requesting.

Enjoy no annual fees forever!

7. Credit limit

Also known as spending limit, this is one of the most important terms you need to know as a credit card owner. Credit limit is the maximum amount charged to your credit card. This limit includes purchases, finance and penalty charges, cash advances, and balance transfers.

Monitor your credit limit and outstanding balance to help you plan your budget and finances better. You can avoid overlimit fees when you spend within the allowed amount you can charge on your card.

Read more: Credit Card Limit: What Is It and How Do Banks Determine It?

8. Due date

This is the date when your minimum payment is due to your credit card company. If you don’t make the payment by this date, you will incur a late fee and your APR may increase. Consider setting up a calendar reminder so that you won’t miss your due dates. This simple solution may also help you avoid paying credit card charges for late payments.

9. Finance charges

This is the total amount of credit card charges you have to pay to your bank. These charges include interest fees and service fees, among others. Your interest fees are charged monthly, while your monthly interest rates can be 3% to 5% of your total balance. To avoid these charges, pay off your outstanding balance in full and on time.

10. Gambling and gaming fee

Credit Card Terms to Know to Avoid Credit Card Charges - Gaming and gambling fee

Photo by Javon Swaby via Pexels



It is the fee charged to you on gaming or gambling transactions. This can also be charged for transactions you make at gaming or gambling establishments, including the placement of wagers, lottery ticket purchases, or other values in conjunction with any gaming or gambling activities[2]. The charge ranges from 3% to 5% or PHP 500 to PHP 1,000 per transaction, whichever is higher.

11. Grace period

This is the period when you can pay your balance without incurring any interest. It usually starts on the first day of your billing cycle and ends a few days later, depending on your bank. If the cut-off date for your payment falls on a weekend, it is best to pay your balance the weekday before to avoid credit card charges.

12. Installment pre-termination fees

These are charges for each installment plan transaction that you pre-terminated. The fee ranges from PHP 300 to PHP 550 or 2% to 5% of your unpaid amount in every pre-termination transaction, whichever is higher.

Before availing of your card’s installment program, check its terms and conditions. See if your bank charges pre-termination fees. If it does, consider paying off your repayments to the last cent to avoid this fee.

13. Late payment fee

These are fees charged to your next billing statement if you fail to pay off your outstanding balance before its due date. The fee is usually around PHP 500 or 6 to 7% of your remaining balance. To avoid this charge, settle your due amount during the grace period.

14. Minimum amount due

It's the amount you have to pay at a minimum to avoid defaulting on your credit card. By paying the minimum amount due, you can keep your card active. However, doing so may result in paying higher interest charges. Instead of settling just the minimum amount to keep your card afloat, pay the balance in full if you can.

15. Overlimit fee

When you exceed your credit limit, you have to pay an overlimit fee. It can range from PHP 300 to PHP 750 every time you go over your limit during a billing cycle.

To prevent this from happening, avoid maxing out your credit card and monitor your spending and billing statements. Additionally, If you have cash on hand for your purchase use that instead.

16. Payment processing or multiple payment fee

Credit Card Terms to Know to Avoid Credit Card Charges - Payment processing fee

Photo by Andrea Piacquadio via Pexels



You have to pay this credit card charge each time you make a payment more than the allowed number monthly. Some banks charge a fee of PHP 50 per extra payment. For example, you can pay your balance four times a month, but you made six payments during the same month. Your bank may charge you PHP 100 for the extra two payments made.

Consider settling your balance in one transaction or within the allowed number of payments per month to keep such credit card charges at bay.

17. Refund fee

When you request for a refund for overpayment, this fee is charged to your card. For example, your electric bill is PHP 1,700 but you accidentally paid PHP 1,800 and requested a refund to get the difference back, you will be charged this fee.

Accidents like this happen, but you can avoid it by double-checking how much you need to pay before proceeding with the transaction.

18. Returned check fees

You may have to pay for a returned check fee if you make payments for your card using a check but have insufficient funds or a closed account. This charge ranges from PHP 500 to PHP 1,500 for every returned check.

You can avoid this credit card charge by choosing another mode of payment for your dues. Consider using your card issuer’s online or mobile banking features. You can also pay your outstanding balance using various mobile payment apps and services.

Read more: Don’t Let Credit Card Fraud Happen to You: Here Are Some Tips

19. Revolving balance

This is the amount you used but left unpaid at the end of each billing cycle. It costs you interest charges every day because the entire outstanding balance is not settled in full.

The amount you pay for your revolving balance adds up to a hefty sum and may slow down your debt repayments. Settle your outstanding balance in full if you can to save on these credit card charges.

20. Service fee for foreign currency transactions

These are extra charges made when you use your credit card outside the Philippines. The fee ranges from 2 to 3.5% of your purchase price.

Before traveling overseas, prepare enough cash on hand for your purchases to avoid these fees. However, if you still opt to use your credit card abroad, try to keep your spending at a minimum.

Final Thoughts

All these terms seem overwhelming, but with time and an open mind, you can get the hang of it. However, knowing essential credit card charges as well as the ins and outs of your credit card can help you use it more wisely. Read your card’s terms and conditions. Additionally, don’t be afraid to ask your bank for clarification.

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The Moneymax Editorial Team consists of talented and experienced writers, editors, investors, and subject matter experts on a mission to help Filipinos build healthier financial lives. Browse the Moneymax blog for information and advice on credit cards, loans, insurance, investments, and other personal finance topics. For more financial news and articles, follow Moneymax on LinkedIn.