This is what a provider charges you when you use your credit card to borrow.
For example, if you have a balance of £100 on a card with 20% APR, it would earn interest of £20 per year.
To avoid paying interest, repay your balance in full every month. If this is not possible, you can pay less by finding a card with a lower APR.
Your credit card bill will specify a minimum payment amount and a date you need to make the payment by. If you do not pay by that date, you will be charged a late payment fee of £12.
To avoid late payment charges, set up a direct debit to pay at least the minimum amount every month.
Missing a payment can also affect your credit rating and lead to your provider increasing your interest rate or withdrawing your introductory 0% APR offer.
If you go over your credit limit will be charged a fee which could be around £12.
You can avoid this by checking your limit and current spending by signing in to your online banking or phoning your provider.
If you know that you are likely to spend too much before the end of the month, ask your provider to increase your credit limit.
Some American Express credit cards and store cards charge an inactivity fee if you go too long without using them, for example more than 12 months.
If you have a card that charges an inactivity fee, consider cancelling it.
You could face the following charges if you use your credit card to withdraw cash:
Withdrawal fee: This is usually about 3% of what you take out, although there is usually a minimum fee amount of a few pounds.
Higher APR: The interest rate charged on cash advances is usually higher than your APR on purchases - often around 27.9% but sometimes much more.
Immediate interest: You will be charged interest on the amount you withdraw straight away.
Here is how to work out if you should withdraw cash using your credit card, and how much it could cost.
This fee is a percentage of the balance you want to transfer. For example, if you transferred £2,000 to a card with a fee of 2.5%, this would cost £50.
You can save by finding a card with a low, or no fee. Here is how to work out which deal will be cheapest.
If you use your credit card abroad, it could charge you:
A loading fee of around 2.99% each time you spend
The exchange rate, which is likely to be less competitive than most travel money rates
Interest on the amount withdrawn straight away*
An ATM withdrawal fee e.g. 3%
* You usually get around 56 days before you are charged interest when you use a credit card for purchases at home
However, cards designed for use abroad can come without fees for spending or withdrawing cash.
Some credit cards charge a fixed fee that you have to pay annually or monthly. These fees generally cost from £12 to £150 a year.
If you have a monthly fee, you will pay it off as part of your credit card bill.
For example, if you had a card with a monthly fee of £3 and repaid £50 a month, £3 of this would pay off the fee and £47 would go towards the interest and balance.
If you think you have been charged any fees incorrectly, contact your credit card provider immediately and ask for a refund.
Find the best credit card for you, whether you're looking for 0% card for balance transfers or purchases or day to day spending and rewards