Unfair Credit Card Charges

In April 2006, the Office of Fair Trading (OFT) declared that credit card default charges had been at an unfair level. Default charges are those which are levied for:

• failing to pay the minimum payment on time
• exceeding your credit limit
• failure to honour a payment made, perhaps if you try to make a payment that would exceed your credit limit and it is refused by your card provider

Any charge that is over twelve pounds is automatically considered unfair, as it is not seen to be a fair representation of the administrative cost incurred by the card provider as a result of your actions. Charges below twelve pounds may also legally be considered unfair, but the OFT will only act against charges above this amount. UK courts are expected to make a final decision about the legal view on credit card default charges by the end of 2008 or the beginning of 2009.