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Charges and fees levied from owing and using a credit card

Last Edit: 18/06/18

Charges and fees that are levied from owning and using a credit card vary from card to card; some cards have introductory offers/features that waver common charges levied by most credit cards. Charges and fees come in two categories: those levied by sellers (sometimes referred to as surcharges) and those levied by the credit card company/provider/issuer.

Credit cards issued by UK high street banks, such as HSBC, Lloyds and TSB

Credit cards issued by UK high street banks, such as HSBC, Lloyds and TSB

Sellers: It was possible for sellers to issue a charge to customers for using a credit card as a payment method -- sometimes referred to as a surcharge -- however, since the 13th of January 2018, a new European Union directive has been introduced, for the European Economic Area (EEA), banning this practice. An administration or booking fee can still be levied, but it cant be tied to the payment method used. The European Economic Area (EEA) includes the following countries: Austria, Belgium, Bulgaria, Croatia, Republic of Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden and the United Kingdom. When purchasing outside the European Economic Area (EEA), it is still possible for sellers to levy a credit card payment charge, and if/when Brexit occurs, then the new EU directive may no longer apply to UK consumers.

Credit card company: There are more types of charges/fees that are levied by credit card providers/issuer than by sellers, some of which are as follows:

* An annual fee charged for issuing the card: this charge is somewhere in the region of £15-30 per annum, and is charged once per annum. This annual fee is sometimes referred to as a "membership fee".

*Foreign currency transaction charge: usually around 3% of the transaction amount.

*Cash Advance charge on foreign currency or travelers cheques: again, this is somewhere in the region of 3%, or a minimum amount of £3.

*Charge is issued if you do not meet the minimum monthly repayment amount. A common minimum monthly repayment amount is £5 or 5% of what is owed.

*Charge is issued if you go over your agreed credit limit.

*If you request a monthly statement by post you may be charged for it.

*There may be a charge for any balance transfer procedure -- where what is owed on one credit card is moved to another.

*Withdrawing cash on your card: there may be a 'cash handling' fee -- a typical fee is around 1-3% of the cash amount withdrawal.

*Using your credit card abroad: a foreign transaction and commission fee may be charged on purchases and cash withdraws.