How to reclaim unfair credit card charges

At a glance

• Unfair credit card charges can include charges made in error, or unreasonably high fees for missed/late payments or exceeding your credit limit.
• Charges of over £12 are generally considered unfair – in the past, some credit card companies charged £30 to £35 for each instance.
• If you think you’ve been charged unfairly in the last six years, you may be able to claim back some or all of them.

Credit cards will always come with various fees and charges, but most of the time they’re viewed as being an acceptable part of using this kind of credit. However, sometimes these charges can exceed reasonable levels, in which case you’re perfectly within your rights to reclaim them. Read on to find out how.

What are credit card charges?

Let’s start by taking a look at the kind of credit card charges you may encounter, all of which should be listed either on your credit card statement or on documentation you have received from your credit card provider.

Some of these charges are normal fees associated with everyday use, while others may be applied if you break the terms of your credit agreement, such as missing a payment or exceeding your credit limit.

Some charges you’re likely to come across can include:

• Annual fees
• Interest on any outstanding balance you have
• Fees for normal card usage, e.g. ATM charges or foreign transaction fees
• Balance or money transfer fees
• Penalty fees (e.g. for making a late payment, missing a payment entirely or exceeding your credit limit)

What are unfair credit card charges?

Unfair credit card charges are typically classed as any penalty charge over £12. Thankfully these are now rare, but it wasn’t always this way.

Prior to 2006, it wasn’t uncommon for charges of up to £35 to be levied for late payments or exceeding credit limits, and so the Office of Fair Trading stepped in to force credit card companies to reduce fees to a £12 default.

Note that some fees will naturally be higher than £12, such as interest costs or fees for balance transfers.

Bear in mind too that some charges can trigger additional penalties, such as a fee for exceeding the credit limit even if it was purely the result of another charge being applied. These aren’t necessarily unfair, although they can certainly feel like it!

How much can I reclaim?

There are generally two types of charges which you can reclaim:

• Unfair credit card charges (if you think the fees were too high)
• Any fees and charges made in error

For charges that are in error, you will be able to claim back the whole amount you were mistakenly charged.

However, where you have had to pay charges because your payment was late, missed or because you went over your credit limit, then it’s not likely you’ll be able to claim the whole amount.

Yet you may be able to make a claim if you’ve had money problems and have been charged excessively for things like missed payments as a result, which have in turn led to further charges being levied.

What credit card charges can’t you claim for?

You can’t claim refunds for any annual fees or normal charges associated with credit card use. Unfair charges are limited to fees levied for missed/late payments or exceeding your credit limit.

How far back can I make a claim for?

Six years prior is normally the maximum length of time you can attempt to reclaim unfair credit card charges for.

Can you claim back credit card interest?

Potentially, yes. If you’re successful and the provider accepts that you’ve been charged unfairly, then you should be able to claim back any associated interest as well (such as if you’ve been charged interest on a fee that was later declared unfair or made in error).

How to reclaim credit card charges

There are a few steps you’ll need to go through in order to reclaim your charges. These are:

1. Check how much you’ve been unfairly charged

The first step is to go back over your old credit card statements to identify where you’ve been charged.

If you don’t have them to hand, you can write to your credit card provider and request a list of all charges they’ve made against you. If they refuse then you can insist that they provide these under the Data Protection Act and, if your credit card provider decides to charge for this, it should cost no more than £10.

Just make sure that you’re asking specifically for a list of the charges made against you – if you ask for copies of your statements, they can and will charge much more.

Look at the fees you have been charged for late or missed payments and if you have exceeded your credit limit.

Are any of these greater than the ‘reasonable’ figure of £12? If so, what were your circumstances at the time? Did you incur an extra charge because you couldn’t pay the first penalty? Make sure to see if there are any charges that are clearly in error as well. Tally everything up, and get ready for step two.

2. Contact your card provider

Once you’ve made a list of any unfair or wrongful charges, you can write to your credit card provider.

Explain why you feel these were unfair and make sure to mention if you were in financial difficulties at the time. Be sure to include your credit card or account number so that the provider can locate their records, and make sure to specify how much you’re claiming for.

Note that the onus is on you to prove that the charges were unfair, so make sure to provide as much evidence as you can. Keep copies of any letters you write too, as well as any documentation you send with your correspondence.

3. Wait for your card provider’s response

You must give the credit card provider time to reply – if you haven’t heard anything after 40 days, consider writing again (and enclosing a copy of your previous letter) or give them a call to chase things up.

When you do receive a reply it’s likely to be one of the following:

• Refusal. The credit card provider may refuse your claim. They might say this is because they feel their charges weren’t unfair, or they will simply dispute your claim.
• Offer. The company may accept they’ve made an error up to a point, and so will make an offer of redress – but it’s likely to be lower than the amount you’re claiming for. Yet it can still be worth considering, because while it may be less than you are asking for, this might be better than pursuing your claim legally but with no guarantee of success.
• Agree. The best result is that the credit card provider agrees to pay your claim in full. While this is the least likely outcome, it is possible.

Beware that your credit card provider may choose to cancel your card in response to your claim, so you may need to search for a new credit card.

What if your claim is rejected?

If the credit card company have has refused to play ball or you are unhappy with their offer, there are still things you can do. You have two main options: complain to the Financial Ombudsman Service (FOS), or pursue them through the small claims court.

Financial Ombudsman Service (FOS)

This will be the easiest (and cheapest) option. You won’t have to pay any fees, and if the Ombudsman agrees with you, the credit card provider will have to pay out. In order to get things started you’ll need the final response letter from your provider, and will need to contact the FOS within six months of receiving it (though you can also refer your complaint to them if you haven’t received a response from your provider within six weeks of contacting them). Head to their website to find out more.

Small claims court

Filing a claim with the small claims court will involve more paperwork as well as additional fees (these can vary depending on how much you’re claiming and whether you have a hearing or not, but can be refunded for successful claims). You can fill in the claim details online or by post, but it’s worth seeking support to decide if this is the best course of action – you can start by contacting Citizens Advice.

How to avoid credit card charges

The best way to avoid credit card charges is to manage your card effectively. This means you should make at least the minimum payment every month, or ideally repay the balance in full to avoid interest accumulating (you can set up a Direct Debit to make sure you never miss a payment). It’s important to track your spending to make sure you stay within your credit limit too, and always stick to the terms of your agreement.

Remember, a credit card can be an incredibly useful tool when used wisely, but it’s important to stay on top of things to make sure you don’t fall into problem debt. Read our guide on whether or not a credit card is right for you, and read more on APR so you know what to expect.