Frequently Asked Questions

There are eight standard costs associated with credit cards - these can include:

• Annual fees
• Interest charges
• Late payment fees
• Foreign transaction fees
• Balance transfer fees
• Cash advance fees
• Over-the-limit fees
• Returned payment fees
  
  

Each credit card provider is different, so always check the terms and conditions of any credit card you plan to apply for. Some will charge you a yearly fee that will include perks and offers. All will charge you interest on balances at the end of any introductory interest-free period or grace period. And if you fail to make a monthly repayment on time, all will charge you interest and fees. You may be required to pay the balance in full too.

Fees can include:

• Monthly fees (sometimes referred to as admin or management fees)
• Application fees (sometimes called set up fees)
• ATM or cash machine usage fees (UK and overseas)
• Foreign transaction fees
• Top-up fees (some top-up options may be free)
• Card replacement fees
• Inactivity fee (when your card is not used for a prolonged period)
  
  

The above is not an exhaustive list, and not all fees will be applicable. For example, you may find there is a fee to top up your prepaid card using your debit card, but it's free if you top up by bank transfer. We explain fees in more detail in the guide: "How to find the best prepaid cards?" under the section: How much do prepaid cards cost?

You may want to think about getting a prepaid card if you:

• Have a poor credit score
• Want help with controlling your spending
• Want to earn rewards and cash-back at selected retailers
• You don't want to carry cash while abroad
• You need a travel card that can hold multiple currencies
• Have children and want to help them learn about money
• Need an alternative to a traditional bank
• Have a small business or are a sole trader

Short term loans should only be used in genuine emergencies, where you need money quickly and don't have a cheaper alternative. Even though these are often considered to be small loans, they are an expensive way to borrow money and should only be used for one occasions. For example - your car breaks down two weeks before payday, and you rely on it to get to work, but you don’t have the money available to pay a garage to fix it. Or your boiler breaks down and needs to be repaired.

Short term loans should not be used to make unnecessary purchases or if you are experiencing financial difficulties for some time. Before applying, consider whether a short term loan is right for your current financial situation.

When you compare short term loans, be sure to explore all the available options rather than going to the first popular short term lender. As a quick guide, you may find it helpful to compare the following factors when looking for the best payday loan or short term loan options for your situation:

• Compare the APR and the Representative APR
• Check the monthly payments and total payment you will need to make and ensure you're confident you can make the payments
• Check the lender is authorised and regulated by the FCA - you can look up a lender on the FCA register.
• Before you apply, know exactly how much and when you will need to pay your loan. Late payments on a payday loan will hurt your credit score, and may cost you much more in fees. Defaults will remain visible on your credit report to other lenders for up to 6 years. And finally, consider cheaper alternatives such as a pay advance from your employer or a 0% purchase credit card.

This is down to your current personal finances. It may be helpful not only to compare vehicle finance options and how much your monthly repayments will be, but to also think about all the additional expenses that come with owning a car. For example, fuel, insurance, maintenance and road taxes. Once you have a monthly total for all these costs, you will know how much you can afford to pay back and the loan amount you will need.

Sometimes it's best to be conservative and borrow less. Give yourself a buffer just in case things go wrong. Remember that your car is at risk if you fail to pay back your car lender.

APR stands for Annual Percentage Rate. This is the total cost of borrowing for a year. It includes the interest you have to pay, as well as any standard fees. You will see APR displayed when viewing and comparing personal loans, credit cards, hire purchase agreements and mortgages.

Representative APR is used as a guide to help give you an idea of the “average” cost for a specific loan. It is “representative” or “typical” of what 51% of customers will receive as a rate (or higher) from the lender. However, there is no guarantee that you will get the Representative APR advertised, as the actual rate you receive will depend on your circumstances.