Credit card fees and charges explained

If you’re thinking of getting a credit card, it’s important to be organised with your payments. If not, you could face unexpected charges and damage to your credit score, which could make it harder to borrow again in future.

You could be charged for both planned and unplanned things such as:

  • Missed or insufficient payments.
  • Using your card abroad.
  • Balance transfers.
  • Money transfers.
  • Cash transactions.

How credit card interest and charges work

Before you sign up for a credit card, make sure you’re aware of fees, charges and how credit card interest works. Credit card charges can be applied to your balance for things including late or missed payments, as well as transactions such as balance/money transfers or using your card abroad.

There are a few credit card fees to be aware of. You can read about them in this handy guide.

Credit card interest rates

There are three types of interest that can apply to your MBNA credit card account:

  • Promotional offers on balance transfers, money transfers and purchases. To keep any promotional rate you'll need to make the minimum payment on time each month and stay within your credit limit.
  • Up to 56 days interest free on purchases if you make your payment in full by your payment due date. If you don't make your payment in full (including the amount of any transfers) then standard interest rates apply from the date of the purchase until the balance is paid in full.
  • Standard interest rates for balance transfers, money transfers, cash advances and purchases. Standard interest rates apply on balance transfers, money transfers, cash advances and purchases once a promotional period has ended.

If you're unsure what interest rate you're being charged, check your credit card terms and conditions or your latest statement.

Transfer and processing fees

These are the most common type of credit card fee:

  • Balance transfer fee, usually charged when moving a balance from another store or credit card to your MBNA account (normally a small percentage of the transfer amount).
  • Money transfer fee, usually applies when moving funds from your MBNA account to your UK bank/building society account (usually a small percentage of the transfer amount).
  • Cash advance fees, both at home and abroad, you might be charged when you make a withdrawal from a cash machine.
  • Using your card abroad. You may be charged additional fees and interest for making non-sterling transactions, or buying non-sterling currency.

Please refer to the terms and conditions of your account for specific details applying to you.

If you travel regularly, it might be a good idea to look for a credit card with a low or no foreign transaction fee - learn more about using your card abroadlearn more about using your card abroad.

Credit card default charges

We’ll let you know if any changes apply. They’re itemised on your statements, which is just one of the reasons it’s important to check the latest one each month.

Missed, late or insufficient payments

If you don’t make at least the minimum credit card payment by the due date shown on your statement each month, you’re likely to be charged a fee and lose any promotional offers on your credit card account.

You could set up a Direct Debit to make payments to your credit card account automatically each month - we’ll collect the amount you choose when it’s due.

Learn more about Direct Debits.

If it’d help to move your payment due date to one which suits you better, please contact us.

Going over your credit card limit

If you go over your credit card limit, it could damage your credit score. You could also lose any promotional offers on your credit card account and be charged the standard interest rate instead. If you need to increase your credit card limit, speak to your credit card provider.

Returned payments

If you make a payment that we’re unable to process, your payment might be returned. That includes Direct Debits and cheques returned due to insufficient funds. In these instances, you might be charged by your bank.

Tips for managing credit well

  • Try to pay off your balance in full to avoid paying interest.
  • Avoid using your credit card to withdraw cash over the counter or at an ATM.
  • Don’t go over your credit card limit.
  • Take advantage of balance transfer cards with lower promotional rates to save money on interest payments.
  • Be aware of charges for things like using your card abroad – check your credit card terms and conditions for full details of any fees and charges.

Get help with money worries

There are things you can do if you're starting to experience money worries, so please talk to us.

You may need extra support from us if:

  • Your personal circumstances have changed - for instance, if you've been made redundant or you're dealing with a long term illness.
  • You're behind with payments or worrying about paying bills.
  • You're up to your credit limit on a regular basis.

Get help with money worries.

Credit card terms explained

What is a credit limit?

Your credit limit is simply the maximum amount of money available for you to spend on your credit card. Your credit limit will be based on your current circumstances when you apply for the credit card account. You must not go over this limit.

What is a cash advance?

You may be charged for withdrawing cash from a cash machine or over the counter, buying non-sterling currency, gambling transactions and other cash equivalents, including sending money order or wire transfers (other than balance transfers or money transfers), buying coins, banknotes or digital currency, paying government fines, enforcement, penalties, fees or costs, online trading such as share dealing or investments, purchasing or topping up electronic money, payment cards, mobile wallets or account dashboard services.

What is a money transfer?

A money transfer lets you transfer money from your credit card to any of your own UK bank or building society accounts. You can benefit from a promotional interest rate on the transfers you make, but a transfer fee may apply. It will form part of your credit card balance and is subject to repayments as part of your monthly statement balance.

Residual interest. What’s that all about?

It’s useful to understand what interest charges might apply when clearing your balance, so we’ve created a video to give you a simple overview on what’s known in the industry as ‘residual interest’. You’ll also find a helpful example in our guide to clearing your balance.

Residual interest video
  • Residual interest.

    What's that all about?

    Well, interest might be charged when you borrow money but you might not know how it's charged.

    Interest will start to accumulate daily on the total amount you owe in accordance with your terms and conditions.

    Every month you'll pay some of it off.

    But what happens is when you pay off the full statement balance? Well, assuming you don't make any new transactions, you'll get another statement which will include a final interest charge.

    That's what's known as residual interest.

    This covers the period between your last statement being issued and the date your full balance payment reaches us.

    But once that second statement is paid off you're all paid up.

    So there you go.

    Residual interest.

    There's more about how interest is charged in your account terms and conditions.