Types of credit card fees – explained
Cash advance fee
A cash advance is when you withdraw cash from your credit card account using an ATM. Each time you do it, you must pay a fee. This consists of interest and unlike purchase transactions which have a grace period before interest is paid, interest starts accruing immediately.
Non-sterling transaction fee
When you use your credit card to buy something in a foreign currency, your card issuer may charge a non-sterling transaction fee. The fee covers the cost of converting the transaction from the foreign currency into sterling. And it’s based on a percentage of the converted sterling amount.
Returned payment fee
If you make a payment to your credit card account that isn’t honoured by your financial institution, you may be charged a returned payment fee. This can happen when, for example, you try to pay off your credit card bill with a cheque that bounces, or from a bank account with insufficient funds.
Additional statement fee
Most credit cards let you access statements free of charge through your online account. Occasionally, though, you or another cardholder might need a statement posted to you, in addition to the one you receive under your card terms. The charge for this is called an additional statement fee.
Late payment fee
If you miss the due date for making your minimum payment, as shown on your statement, you’ll be charged a late payment fee. The fee amount depends on your specific card and terms.
Charges when using a card abroad
There are several types of fees to keep in mind when using your credit card abroad.
These can include:
·Commission charges.
·Non-sterling transaction fees.
·Non-sterling ATM withdrawal fees.
· Interest on cash withdrawals.
Always read your terms carefully to understand any potential credit card payment charges before using
your card abroad.
Charges by sellers
It used to be common for sellers to charge extra for paying by credit card. But since 13 January 2018, these kinds of fees have been banned in the UK and should no longer be added to your purchase amounts. Keep in mind, though, that credit card surcharges may still be charged abroad. American Express welcomed the ban and believed this decision has created a level playing field for consumers and will give them the confidence to use the payment method of their choice.
