Small Print

As with most things, credit cards have a lot of "small-print" that you have to read and understand before you apply for an account. There are certain things mentioned in the small-print that you need to be aware of.

Issuers love to tell you of all their "low" interest deals but will leave the inevitable higher interest rates, and foregin trasaction charges, to the small-print.

Key credit car small-print items to look out for:

• Foreign "loading" - issuers charge up to 2.75% when you use your card abroad - this includes making internet purchases when the currency is anything other than GBP. As far as we are aware all lenders charge this except Nationwide. [More]
• Cash advance or withdrawal fee. Using your card to withdraw cash generally incursa a handling fee, regardless of whether its at an ATM or inside a bank branch.Withdawing cash, on a credit card, abraod means you have to pay the handling fee on top of the foreign loading charge
  NB: Foreign loading and cash advance feeswill normally apply on debit cards not just credit cards, unless you use a UK based ATM, or a branch of your own bank.
• Balance transfers will always be paid off first. Therefore, when you have a 0% APR deal, and you have a £500 balance transferred, and £500 of purchases on the card, and you repay £5000,it will clear the balance transfer, but not the £500 purchases. You will then pay the typical APR interest on the purchase balance. [More]
• Late payment fees are charged when you don't meet the payment date specified on the statement. Late payments may also be recorded on your permenant credit record, which will affect your credit score and future credit card applications.
• Over limit fees - Going over your credit limit will incur charges and also probably affect your credit score.
• Payment protection insurance -issuers like to sell it as "just 79p for every £100 owed", but actually this adds up to be a substantial additional amount. With a balance of £1000 you pay £7.90 for every month this balance is outstanding, which works out to £94.80 per £1000 per year. In others words this works out to be an extra 9.48% APR on top of your typical APR! These policies notoriously don't pay out and are a complete waste of money. A better bet would be to get income protection, or other critical illness cover independently.