Credit Card fees and charges explained

Most Credit Cards and Charge Cards come with fees. These will depend on the type of card you have, and how you use it. Here's what you need to know.

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.

The charges you pay partly depend on the type of Card you have and how you use it. Read your Card's terms and conditions to see the interest rates and fees associated with it.

Try these tips to help you avoid additional Card fees:

Pay your balance on time - If possible, set up a monthly Direct Debit to repay your balance regularly. As an American Express® Cardmember, you can also set up payment due date reminders on the American Express® App.

Pay off as much of the balance as possible - Paying the full amount owed each month means you won’t need to pay interest on the money you’ve borrowed. If you can’t pay the full balance, just pay as much as you can. All Credit Cards come with minimum monthly repayment amounts, and by making these payments on time, you won’t incur any late fees. But paying this way does mean you’ll accrue interest on the remaining balance the following month. If you only pay the minimum due it will take you longer to repay what you owe and it will ultimately cost more.

Stay within your credit limit - Your credit limit is your contractually agreed spending limit per month. If you exceed this, your transactions may be declined, or you may have to pay an over-limit fee. This can affect your credit rating which means you may find it difficult to borrow money in the future.

View statements online rather than requesting an additional copy by post.

Remember the cash advance fee – payable when withdrawing money from an ATM with your card.

Be mindful of currency conversion - American Express charges a currency conversion fee of 2.99% for every purchase you make in a foreign currency. And if you withdraw cash abroad, you’ll be charged a cash fee of 3% of the withdrawal amount, or £3 (whichever is greater).

Using your Credit Card effectively can make payments more manageable, but it’s important to be aware of the Card’s terms to avoid additional charges and negative financial impact. 

If you do incur additional fees, try to settle them as soon as possible to avoid any further damage to your credit score, or bigger charges.

A Card surcharge is a fee that a business adds to the amount of a purchase when a customer uses a Credit or Charge Card. 

As of 13 January 2018, the government banned surcharging of consumer payment products in the UK, meaning that businesses can no longer add a fee to the purchase amount when consumers use a Credit or Charge Card. 

American Express welcomes the ban and believes this decision will create a level playing field for consumers and will give them the confidence to use the payment method of their choice.