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Credit card fees and charges explained

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 fees and it’s also likely to damage your credit score and affect your ability to borrow in future. You could be charged fees for planned and unplanned things such as:

  • Missed, late or insufficient payments.
  • Returned payments.
  • Exceeding your credit card limit.
  • Using your card abroad.
  • Balance transfers.
  • Money transfers.
  • Withdrawing cash.

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, exceeding your credit limit as well as transactions such as balance/money transfers or using your card abroad.

There are many types of credit card fees and charges you should be aware of. To help you stay in control of your finances, you can read about them in this handy guide.


Missed, late or insufficient payments

If you don’t make at least your minimum credit card payment, you are likely to be charged a fee as well as losing any promotional offers on your credit card account.

Make your payments on time by arranging a Direct Debit to cover your credit card bill every month or by setting yourself reminders to do it at a regular time, like straight after pay day, making sure you leave enough time for any manual payments to clear before your due date. Here’s some more general information about how to make payments to your account.

If you think you might struggle to make your next payment or are experiencing financial difficulties, contact your credit card provider. At MBNA we’ll always try to help.


Returned payments

If there’s not enough money in your bank account to cover your credit card bill, you might have your payment returned and be charged a fee by both your bank and your credit card provider. Make sure you have enough funds in your account before your credit card payment goes out.


Going over your credit card limit

If you go over your credit card limit, you could incur charges and it could also 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 raise your credit card limit, speak to your credit card provider.


Using your card abroad

You may be charged a fee every time you use your card abroad to withdraw cash or make purchases in a foreign currency. If you travel regularly, it might be a good idea to look for a credit card with a low foreign transaction fee. Find out more here.


Balance transfers

Transferring a balance from one credit card to another usually comes with a handling fee, normally a percentage of the amount you’re transferring.

Use a credit card wisely and it can help spread the cost of purchases and improve your credit score, but use it irresponsibly and you could find it difficult to borrow money again.

Just to recap, here are some quick tips for managing your credit card 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 fees and charges.