Credit card companies make money in three ways: fees charged to merchants who accept credit cards as payment, the interest you, the consumer, pay on any balances you carry from month to month, and fees charged to you, the consumer.

Why charge you fees?

Credit card companies are going to get money from consumers in any way they can, and credit card fees represent the most profitable way to rake it in.

While interest rates cover the credit card company’s cost of loaning you money, they aren’t nearly as profitable to the company as fees. That’s because not all credit card users carry a balance from month to month (and therefore pay no interest), while some credit card users default and never repay their balances.

Credit card fees, on the other hand, go straight into the creditors’ pockets.

Here are the more common credit card fees and how you can avoid them.

Annual Fees – Some credit cards charge you an annual fee just to hold the card. This typically applies to cards that offer unlimited miles rewards programs or other special member benefits. Annual fees may also apply to credit cards for borrowers with bad credit.

Late Fees – Perhaps the most common but also most avoidable credit card fee is the late fee. Typically ranging from $19 to $39, you will get dinged with a late fee if your monthly payment is even a day late.

Unfortunately, the late fee is only the beginning of your problems. Chances are your credit card will report you to the credit bureaus and may even raise your interest rate.

Whenever you can, call your credit card company before you’re late or as soon as you realize you missed a payment. Explain your mistake and ask for their help. A nice customer service rep may be able to knock off the fee or prevent damage to your credit report.

Balance Transfer Fees – It’s true that you can save a lot of money on interest by transferring balances to card with the lowest annual percentage rates.

This privilege is not always free, however. Many cards assess a fee of 1% to 3% the balance being transferred. Some cards cap the fee at $75 or $100, but others do not.

If you have a large balance on a high-rate card, you may still be able to save money by transferring it to a lower rate card, even if they charge a balance transfer fee. Just read the fine print and do a little math to be sure.