Credit cards can come with a variety of features which can be suitable for you dependent on what your needs are.
Many credit cards can also come with a variety of charges and fees, so if you are switching cards or card providers, it can be useful to know what the charges are.
The below list is by no way exhaustive so please refer to the credit card terms and conditions issued by your provider.
Late repayment fees
Lenders, including 118 118 Money will charge customers for any missed or late repayment fees.
Missed or late repayments can also impact your ability to access credit in the future as these are reported to Credit Reference Agencies such as Experian or TransUnion. Lenders will use these reference agencies as part of your application for credit in the future. Having a blemish on your file does not automatically mean you’ll be rejected; however, lenders can interpret this as you possibly mismanaging your finances.
This can also impact the type of credit you’re likely to be eligible for, a less than perfect credit score may mean that you won’t necessarily qualify for the best products – though other factors are also taken into consideration too.
If you have a 118 118 Money Credit Card, failing to make at least the minimum payment on time may result in a late fee.
Each month, you must pay us at least the Minimum Payment by the due date set out in your statement. The Minimum Payment will be the greater of:
- 5% of the Account Balance shown on your statement plus any amount you have spent over your Credit Limit plus any interest charges plus any Late Repayment Fees plus any Cash Transactions: or:
Cash withdrawal fees
A question often asked is whether you can you withdraw cash with a credit card? The simple answer is yes. You can. However, using this facility is accompanied by fees charged by your provider, unlike a debit card which doesn’t have any fees associated with it for withdrawals.
In addition to the lender charging fees, some ATM’s may also levy usage charges (also true for Debit cards in this case).
Cash withdrawals are also recorded on your credit report too which will be visible to other lenders if you apply for credit in the future. Cash withdrawals can be interpreted as being uncreditworthy as lenders may view this as you not having cash in your bank account. This doesn’t necessarily impact your ability to get credit in the future, but it may be viewed alongside your entire credit report when lenders are determining whether to approve you for credit or not.
Therefore, withdrawing cash with a credit card can often be expensive as you will also be charged daily interest on the amount you withdraw. In addition to this, cash advance fees will be applied to your account. This fee is applied each time you withdraw, so multiple withdrawals will result in multiple charges.
The 118 118 Money Simple Interest Rate card is also inclusive of these fees for cash transactions and withdrawals, each cash transaction will incur a 5% fee.
So, if you are eligible for our Credit Card, bear this fee in mind should you choose to withdraw cash.
Balance Transfer fees
People often consider transferring their outstanding balance when either the purchase period (the amount of time in which all the purchases you make remain interest free on their existing cards is ending, or if the interest rates on an alternative credit card are more affordable). At the end of the purchase free period, card holders may consider transferring the outstanding balance on to an alternative card which may work out more cost effective in certain instances.
By transferring the existing balance to another credit card with a lower interest fee or interest free purchase periods or even consolidating outstanding balances (consolidating balance(s) are whereby you move one or more balances to a new card for a singular payment), applicants can, in theory reduce their monthly payment by having one payment on a lower interest rate. Though this isn’t exclusively the case in every scenario.
Some credit card providers my charge you with a balance transfer fee. This fee is usually a percentage of the balance you’re transferring (can vary from one lender to another). Should you decide to move multiple balances across to your new provider, you will be charged this fee each time.
Therefore, balance transfer options can be viewed as a key consideration when assessing which credit cards which you may be eligible for.
There are no Balance Transfer fees with the 118 118 Money Simple Interest Rate Credit Card.
Fees for exceeding your credit limit
Dependent on the agreement with the card provider, your credit card will come with a maximum credit limit, this is usually dictated by your own credit scoring and/ or any promotional rates card providers may be advertising.
The credit limit is the amount you have at your disposal to spend or balance transfer across. Should you find yourself exceeding this credit limit your card provider will likely charge a fee for the amount exceeded over the agreed credit limit.
Unsurprisingly, exceeding your credit limit can adversely impact your credit score too. Primarily, as Credit Reference Agencies may down score you on overall credit utilisation.
For best practice and wherever possible, its recommended that you should keep your utilisation ratio under 30% - on both individual and overall credit.
Foreign use and transaction fees
If you plan to use a credit card abroad beware that there may be charges applied for these transactions. Although there are some specialist credit cards which are by their very features designed to be used abroad without charges, this isn’t true of all credit cards.
If your lender charges fees for foreign usage, these are likely centred around non-sterling foreign transaction fees and/ or flat fees each time you use your credit card abroad.
These fees are passed on the credit card holder as the transaction will need to be converted into sterling currency. This is affected by factors such as exchange rates at the time the payment is processed and, in some cases, there are fees involved in this process.
Your terms and conditions will indicate whether your credit card issuer charges foreign transaction fees or not.
How to avoid credit card charges
Ensuring you make at least the minimum payment by the required date will ensure you’re not charged with late or missed payment fees. Remember, these can affect your credit score too – so not only will you be charged a fee, but your chances of being successful in future credit applications may also be impacted too. You can also check your credit score by using the services provided by credit reference agencies such as Experian or TransUnion.
You can also set up an automated Direct Debit, this can help as you aren’t compelled to remember payment due dates. You can just pay it off each month. Alternatively, you can set up a Continuous Payment Authority; whereby the payment(s) are automatically taken from your debit card.
Exceeding your credit limit isn’t advised as this is accompanied by fees from your lender too. It helps to know what your credit limit is and what amount you still have access to. Similar to late or missed payments, dependent on your providers terms and conditions, you may find yourself being charged a penalty fee in addition to a higher APR on the exceeded amount (varies from lender to lender). Moreover, exceeding your agreed limit can adversely impact your credit scoring too.
If you’re having difficulties with your payments, please contact us on 02920 548 118.
You can also use organizations which offer free advice on a range of financial matters, this includes:
- National Debtline: Is a free, confidential, and independent phone helpline to help people with debt problems. You can call them on 0808 808 4000. (England, Wales, and Scotland only).
- Advice UK: Is a network of independent advice-providing organisations. You can call them on 0300 7770107.
- Citizens Advice: Is a network of local offices offering free, confidential, independent advice. If you live in England or Wales click here, or Northern Ireland, click here. If you live in Scotland, click here.
- Step Change: Is a debt counselling charity. You can call them on 0800 138 1111.