Credit Card Fees
These days credit cards are usually free, so the "annual fee" has almost become a thing of the past. However, you can expect to be charged an additional fee in the following circumstances:
- If you do not make the minimum payment on your monthly balance.
- If you exceed your agreed credit limit.
- If you move your balance from one card to another (a "balance transfer fee").
- If you use your credit card to withdraw cash at an ATM or over the counter at a bank or building society (often referred to as a "cash advance fee" or "cash withdrawal fee"). There is an upfront withdrawal charge, plus you'll be charged interest from the date of the transaction, even if you repay your next statement in full.
- If you use your credit card overseas (often referred to as a "currency conversion fee" or "foreign usage fee").
Credit Card Insurance
Payment protection is a kind of insurance policy offered by many card companies to cover payments in the event of illness, disability or unemployment.
Signing up for payment protection means you will be charged an additional premium, but it is not mandatory to accept this policy.
Some of the major credit card issuers also offer insurance on goods bought using their card.
These include:
- Price protection - If you buy something that is later reduced in a sale (or you find it cheaper elsewhere), you can claim back the difference, within a given time period.
- Purchase protection - If you buy something on your card that is lost, damaged or stolen at a later date, you can reclaim some or all of the cost from the card company.
- Travel accident insurance - This pays out lump-sum benefits if you are killed or seriously injured while traveling in transport paid for on your card. As there is no medical or baggage cover, don't confuse this with full travel insurance.
- Online fraud guarantees - Stops you from being liable for any fraudulent spending on your account while 'distance shopping' via mail, telephone or online.
Some card issuers charge extra for these policies but generally they are only worth having if they come free of charge. And, of course, always read the small print so you are fully aware of restrictions.
Finally, Section 75 of the Consumer Credit Act provides an extra layer of protection when paying by credit card.
Put simply, if you buy any goods costing between £100 and £30,000 on your credit card you can claim against the card issuer if something goes wrong. Even if you have only paid a deposit on your credit card, you can claim a refund of the entire cost of the goods from the card issuer. So, if the goods fail to arrive, are damaged or defective, your credit-card provider must reimburse you for your loss. This extra protection is a valuable safety net when making major purchases.
Credit card types:
Please note: TheMoneyFactor.co.uk makes every effort to ensure that all our information and the results from our calculators are accurate and current. However, we cannot guarantee 100% accuracy and cannot be held liable for any errors.
Nothing within TheMoneyFactor.co.uk website is, or shall be deemed to constitute, financial or other advice or a recommendation to purchase any product or service. Any and all information provided within TheMoneyFactor.co.uk website is for general information purposes only.
TheMoneyFactor.co.uk advises that you always check with the finance service provider before signing any agreement or purchasing any product.
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