What Are Trading Fees?

What Are Trading Fees and Why Do They Matter?

When you’re new to crypto, it’s easy to focus only on buying your first coin—Bitcoin, Ethereum, or something else that’s trending. But behind every purchase, there’s something quietly eating into your balance: trading fees. Whether you’re buying through a beginner-friendly platform like Coinbase or stepping up to Coinbase Advanced, trading fees are always present. And if you don’t understand how they work, you could be losing more money than you realize.

So, what are trading fees? They’re the costs you pay to execute a trade—essentially the price of using the platform. These can come in many forms: hidden markups (called “spreads”), flat fees per trade, or percentage-based fees that change based on how you buy. And they can dramatically affect your returns, especially if you’re making multiple small trades or using expensive payment methods like debit cards.

This guide is designed to explain exactly what trading fees are, how they work, and how to reduce them. We’ll break it all down in plain English, with real examples from Coinbase and Coinbase Advanced, so you always know what you’re paying—and how to keep more of your crypto.

Before we begin, if you haven’t already, check out the full Guides section for more beginner-friendly explainers like this one. These guides are designed to help you build confidence, avoid hidden costs, and navigate crypto with clarity.

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The Different Types of Crypto Trading Fees

Crypto trading fees aren’t one-size-fits-all. Depending on the platform, how you buy, and even what time you trade, fees can show up in different ways. Understanding the types of fees you’ll encounter is the first step to managing your crypto costs and protecting your investment.

Here’s a breakdown of the most common trading fees beginners run into:

1. Spread Fees

This is one of the most common but least understood fees. The spread is the difference between the price you’re shown and the actual market price. For example, if Bitcoin is trading on the open market at $30,000, Coinbase might quote you $30,300 to buy and $29,700 to sell. That $300 gap is the spread—your hidden cost for convenience. The wider the spread, the more you’re paying without realizing it.

2. Flat Transaction Fees

These are fixed fees charged per trade, regardless of size. Coinbase often applies a flat fee on top of the spread, especially for smaller trades. For instance, a $2.99 fee might be added to a $100 purchase. That’s a nearly 3% fee—before accounting for the spread. These fees shrink slightly with higher trade amounts but can still add up quickly.

3. Maker vs Taker Fees

On platforms like Coinbase Advanced, the fee structure is more transparent and dynamic. You’ll encounter two types:

  • Maker Fee: Charged when you place a limit order that adds liquidity to the market.
  • Taker Fee: Charged when you place a market order that removes liquidity.

Generally, maker fees are lower than taker fees. Beginners who learn to use limit orders can reduce their trading costs significantly.

4. Payment Method Fees

The way you fund your purchase also affects your total cost. Debit cards, for example, often incur higher fees than bank transfers. On Coinbase, buying with a debit card may trigger both a spread and an additional 3.99% fee.

5. Network Fees

Although not technically a “trading” fee, network fees (also called gas fees) apply when transferring crypto between wallets or to another exchange. These are paid to the blockchain network, not the platform—but they still impact your final cost.

Being aware of these different types of fees helps you recognize where your money is going. In the next section, we’ll compare how Coinbase and Coinbase Advanced handle fees—so you can decide which one suits your needs and budget best.

Comparing Fees on Coinbase vs Coinbase Advanced

When you start your crypto journey, the default path for most beginners is Coinbase—and for good reason. It’s clean, simple, and designed to minimize confusion. But simplicity comes at a cost. The trading fees on Coinbase are higher than many realize, and once you begin trading more frequently or with larger amounts, those costs add up fast.

On Coinbase, every transaction includes:

  • A spread fee, usually around 0.5%–2% (but it varies by asset and market conditions)
  • A flat transaction fee that increases based on the size of your trade
  • Additional fees depending on your payment method (debit cards are the most expensive)

Let’s say you buy $200 worth of crypto using a debit card. Between the spread and the card fee, you could be losing 5% or more instantly.

Coinbase Advanced, on the other hand, offers a much more transparent fee model using the maker-taker structure. Instead of hidden spreads and flat fees, you’re charged a percentage based on how you place your order. As of writing:

  • Maker fees start as low as 0.40%
  • Taker fees start around 0.60%
  • Fees decrease as your monthly trading volume increases

This means that if you’re comfortable placing limit orders, you can often reduce your fees compared to simple market orders on regular Coinbase. And for users placing larger trades or multiple transactions, Coinbase Advanced can result in significant savings.

There’s also more control: you can see exact prices, set your trade parameters, and avoid the guesswork that comes with spread-based platforms.

For beginners, our advice is simple: start on Coinbase to get comfortable. Then, once you feel ready, switch to Coinbase Advanced for lower fees and better control. You can sign up using our Coinbase Advanced referral link for the same secure access, with advanced tools.

In the next section, we’ll walk you through how to calculate your real trading costs, and how to avoid the most common fee traps that trip up beginners.

How to Calculate and Reduce Your Crypto Trading Fees

Understanding what trading fees are is one thing—knowing how to calculate them and take action to reduce them is what separates confident beginners from frustrated ones. Fortunately, calculating fees isn’t as complicated as it seems, and once you understand the math, you’ll be able to make smarter decisions every time you trade.

Let’s break it down with an example:

  • You buy $100 worth of Bitcoin on Coinbase
  • Coinbase includes a spread of 1.5%, so you’re really getting $98.50 worth of BTC
  • Add a $2.99 flat fee for the transaction
  • Total cost: $100 – $2.99 – $1.50 (spread) = $95.51 of actual crypto

That’s a 4.5% fee, before you even consider other factors like payment method fees. If you’re doing this multiple times a month, you could easily be losing hundreds in hidden costs over time.

So how do you reduce these fees?

  1. Use Bank Transfers Instead of Debit Cards
    On Coinbase, debit cards can trigger a 3.99% fee. Bank transfers take a bit longer, but are much cheaper (or sometimes free).
  2. Switch to Coinbase Advanced
    Use limit orders to take advantage of lower maker fees. Even as a beginner, you can quickly learn how to place these orders and reduce your trading costs.
  3. Trade Less Often, in Larger Batches
    Trading small amounts frequently can mean paying high flat fees again and again. Instead, batch your trades if possible.
  4. Track Fees with a Simple Spreadsheet
    Logging what you spent, what you received, and the fees deducted can help you spot patterns and optimize your behavior over time.

Fees are one of the easiest aspects of crypto to control—but only if you understand them. The good news is, after reading this guide, you’re already ahead of the curve.

Common Beginner Mistakes with Trading Fees

When starting out, most beginners don’t realize they’re overpaying for every single crypto trade. Fees are often “invisible,” and platforms don’t always break them down clearly. That’s why many new users find themselves confused when their $100 trade only results in $95 worth of crypto.

Here are the most common fee-related mistakes beginners make—and how to avoid them:

1. Always Using Market Orders

Market orders are fast, but they often come with slippage and higher taker fees. Beginners who only use market orders miss out on the benefits of limit orders, which can offer better prices and lower fees—especially on Coinbase Advanced.

2. Using Debit or Credit Cards for Every Purchase

Card payments are convenient, but they’re also expensive. Fees of 3.99% or more are common. Instead, learn to use bank transfers or ACH deposits, which are much cheaper (and often free).

3. Ignoring the Spread

Many users focus only on visible fees and forget about the spread. This hidden markup can be 1–2% or more, depending on the asset and platform.

4. Trading Too Often in Small Amounts

Every trade can trigger a flat fee. If you buy $20 of crypto five times, you might pay $10+ in total fees, instead of just making one $100 trade and saving significantly.

5. Not Upgrading to a Better Platform

Sticking with Coinbase forever might seem easier, but Coinbase Advanced offers much lower fees and better transparency. Once you’re ready, making the switch is a smart move.

Learning to spot and avoid these traps early is a big part of building good crypto habits. You don’t need to be an expert—you just need to pay attention.

Choosing the Right Platform for Your Goals

Choosing the right exchange isn’t just about user interface or app reviews—it’s also about how much you’ll pay in fees. And for beginners, understanding the tradeoff between simplicity and cost is crucial.

Here’s how to think about it:

Coinbase

Best for absolute beginners who want a clean, no-stress way to buy their first crypto. The app is easy to use, but you’ll pay for that convenience with higher fees. If you’re only planning to make a couple of small trades to test the waters, Coinbase is fine.

Coinbase Advanced

Ideal once you’re ready to start saving money on fees and want more control over your trades. The interface shows full order books, lets you place limit orders, and uses the maker/taker fee model, which is generally far more cost-efficient than flat fees and spreads.

If you want to reduce fees and learn more about how crypto markets work, Coinbase Advanced is the clear choice. It’s the same secure account you’re already using—just a different dashboard. You can start here: Coinbase Advanced Referral Link

As your goals change—from experimenting, to investing, to learning how to trade—you’ll want a platform that grows with you. Making the switch to a fee-efficient platform early can save you time, stress, and money.

Frequently Asked Questions (FAQ)

Are Coinbase fees really that high for beginners?
Yes. Between spread fees, transaction fees, and card fees, beginners on Coinbase often pay 3%–6% or more per trade.

How can I check what I paid in fees?
On Coinbase, review your transaction receipt after each trade. On Coinbase Advanced, fees are shown more clearly before you confirm.

Is Coinbase Advanced safe for beginners?
Yes. It uses the same login and security features. The interface is more detailed, but it’s a great place to learn and save on fees.

Should I avoid buying with a debit card?
If you want to minimize fees, yes. Debit card purchases typically come with a 3.99% fee, while bank transfers are often free or low-cost.

Can I reduce fees by using limit orders?
Yes. On Coinbase Advanced, using a limit order typically qualifies you for the lower “maker” fee—often saving you a substantial percentage over time.

How do fees compare across platforms?
Coinbase is among the easiest to use but also one of the most expensive. As you gain experience, switching to platforms like Coinbase Advanced can significantly reduce your trading costs.

Final Thoughts: Know Your Fees, Keep More of Your Crypto

Trading fees may seem like a small detail, but for beginners, they can have a huge impact. A few percentage points here and there might not seem like much, but over time—especially with multiple trades—they can seriously shrink your holdings.

The good news? Fees are predictable and avoidable. Once you understand how they work and where they show up, you can plan your trades more effectively and avoid the common beginner mistakes that cost others real money.

Start small, use the right payment methods, and when you’re ready, move to a platform like Coinbase Advanced to reduce your fees and gain more control over your trades. It’s a simple upgrade that can make a big difference in your crypto journey.

To get started, you can create your account using this Coinbase Advanced referral link and begin trading with confidence.

And don’t forget to check out our full Crypto Guides section for more beginner-friendly explainers that help you make smarter decisions, one step at a time.