Credit Card Charges And Fees Demystified

Credit card charges that might show up on your statement include fees from travelling abroad, cash withdrawals, or paying your interest and balance late.

Ruth Jackson-Kirby Published on 10 December 2020. Last updated on 18 February 2021.
Credit Card Charges And Fees Demystified

Credit card charges and fees can substantially increase your bills. There are a number of fees you need to be aware of, from penalties for late payments to charges for using your credit card abroad.

What are the charges and fees on credit cards?

There are a host of charges and fees that your credit card provider might add to your bill depending on how you use your credit card. Here’s a rundown of the most common you might encounter.

There are a host of charges and fees that your credit card provider might add to your bill depending on how you use your credit card. Here’s a rundown of the most common you might encounter.

Annual fees

If you have a premium credit card, you may be charged a monthly or annual fee in return for extra perks, such as a higher cashback rate or access to a concierge. (Read our guide to rewards credit cards for more information.)

Balance transfer fees

Credit cards that allow you to transfer a balance from another credit card often charge a balance transfer fee. This is usually a percentage of the amount you are moving onto the card. (Find out more with our guide to balance transfer cards.)

Cash withdrawal charges

Use your credit card at an ATM to withdraw money and you’ll usually be charged a cash withdrawal fee, typically a small percentage of the amount withdrawn. Also be aware that you are likely to be charged interest from the moment the money leaves the cash machine.

Charges for exceeding your credit limit

If you go over your credit card limit you will be charged a fee.

Foreign usage fees

When you take your credit card abroad you face paying extra fees when you use it. Some providers will charge you a transaction fee every time you use your card. You’ll also pay a cash withdrawal charge if you take money out using your credit card or use your credit card to buy foreign currency. You can avoid these fees if you get a credit card specifically designed for use overseas. (Find out more with our guide to travel credit cards.)

Interest

If you don’t pay off your balance in full each month, you’ll be charged interest. The amount you’ll pay will depend on your credit card deal. You may also find you pay a different interest rate depending on the type of transaction. For example, your credit card could have different interest rates for:

  • Purchases
  • Cash advances
  • Balance transfers

» MORE: Credit card interest rates

Late-payment fees

If you are late paying off your credit card balance, or you don’t at least make the minimum repayment, your credit card provider can charge you a late-payment fee. This should not be more than £12.

Money transfer fees

Some credit cards allow you to move money from your card into your current account. This can be a great way of shifting expensive overdrafts onto an interest-free credit card. But you will usually be charged a money transfer fee. This is a percentage of the amount you move into your current account. (Find out more with our guide to money transfer credit cards.)

Additional credit card charges

These are a few rarer fees that can also be added to your bill:

  • Additional cardholder fee: You may be charged if you ask to have another credit card issued on your account for someone else to use.
  • Card replacement fee: Some banks will charge you to replace a lost credit card.
  • Dormancy fee: Don’t use your credit card for several months and you may be charged a monthly fee.
  • Paper statement fee: You may be charged a fee if you request a paper statement rather than an electronic bill.
  • Returned payment fee: If your bank tries to take a credit card repayment and there isn’t enough money in your bank account, you may be charged a fee of up to £12.
  • Trace fee: If you move and don’t tell your credit card provider, they may charge a fee for finding you.

Where can I review the credit card charges I’m paying?

You should check your credit card statement every month to see if you’ve been charged any fees. They will all be listed with details of the type of fee and what it has cost.

Can I dispute charges and fees?

If you think you’ve been charged credit card fees incorrectly, contact your credit card provider and ask for a refund. If you're unhappy with the response you get, you can take your complaint to the Financial Ombudsman Service.

About the author:

Ruth is a freelance journalist with 15 years of experience writing for national newspapers, magazines and websites. Specialising in savings, investments, pensions and property. Read more

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