Credit card charges can quickly add up if you are not careful so you need to be aware of how they are incurred and how much they are.
You can find details of your credit card’s charges in the ‘Summary Box’ found either on your credit card statement or on the card company’s website. This information may well be displayed in a similar way to the table below:
| Annual fee: |
0% |
| Other charges: |
|
| Handling fees: |
|
| Balance transfers |
2.98% (min. £3) |
| Cheque transactions |
2.98% (min. £3) |
| Money transfers |
2.98% (min. £3) |
| Cash transactions |
3.00% (min. £3) |
| Commission on foreign transacts. |
2.99% (min. £3) |
| Default charges: |
|
| Going over limit |
£12 |
| Making late payments |
£12 |
| Returned payments |
£12 |
The credit card charge for balance transfers is a given percentage of any sum you ask to transfer onto a card from another credit card, if you transfer in £3,000 and the fee is 3% then you will pay a £90 handling fee.
Some credit cards come with credit card cheques, these are an expensive way of using credit cards as not only will you pay a handling fee but your transactions will also attract a higher rate of credit card interest. We suggest you avoid using these if your credit card comes with them.
Money transfers are transfers from your credit card to a current account or other bank account. Not only is there a handling fee but this type of transaction will attract a higher rate of credit card interest. Avoid doing this if at all possible.
Cash transactions are the most expensive type of credit card transaction. As you can see from the table above you will be hit with the biggest charge for this type of payment. Cash transactions also attract the top rate of credit card interest. No need to point out how inadvisable it is to use a credit card to draw cash out of an ATM.
The charges levied by credit card companies when their customers make late payments or go over their credit limits used to be much higher – around £30 commonly. However the Office of Fair Trading pronounced that such high charges were unfair and the card companies reduced them to a more manageable £12 in most cases. The best way to keep credit card costs down is to avoid racking up charges in the first place.
