Credit Card APR and Fees Explained (UK)

What is APR on a credit card?

APR stands for Annual Percentage Rate. It is the standardised cost of borrowing expressed as a yearly figure, including the interest rate charged on the balance and any mandatory fees that apply to the product. The APR formula is set out in the Consumer Credit Act 1974 and associated regulations, making it possible to compare products from different issuers on a like-for-like basis.

On a credit card, interest is typically calculated on a daily basis using the daily periodic rate, which is the APR divided by 365. If a cardholder carries a balance from one month to the next, interest accrues on that balance daily until it is cleared. The monthly statement will show the interest charged for that period.

It is important to distinguish between the purchase rate APR and any introductory or promotional rates. Many credit cards offer 0% on purchases or balance transfers for a defined period. Once that introductory period ends, the standard purchase rate applies. The APR shown in advertising is the standard rate, not the introductory rate, though any introductory offer must also be clearly disclosed alongside it.

What is a representative APR and the 51% rule?

When a credit card issuer advertises a product, the Financial Conduct Authority (FCA) requires the advertisement to display a representative APR. This is the rate that must be available to at least 51% of consumers who are accepted for the product. The rule is set out in the FCA's Consumer Credit sourcebook (CONC 3) and was the subject of the FCA's consultation paper CP26/15 (published April 2026), which reviewed financial promotions rules for consumer credit.

The practical implication is that up to 49% of accepted applicants could receive a higher APR than the one advertised. The rate an individual receives depends on their credit file, income, existing debt levels, and the lender's own risk appetite. A borrower with a thinner credit history or past adverse markers may be offered a rate at the upper end of the lender's pricing range, even though they passed the eligibility criteria.

The FCA's CONC 3 rules specify that a representative APR must also be shown when an advertisement includes what are called "trigger" pieces of information: the amount of credit, any deposit required, the amount or number of repayments, or the duration of the agreement. Including any one of these triggers in an advertisement requires the representative APR to be prominently displayed.

Checking the actual rate before the credit agreement is finalised is therefore essential. The lender is required to disclose the specific rate being offered to a particular applicant in the pre-contract credit information, usually provided as a summary box, before the agreement is signed.

Published representative APRs: selected examples

The table below shows representative APRs for selected credit card products as published by their respective issuers. These are illustrative examples only; rates are subject to change and readers should verify current terms directly with each issuer before applying.

The Bank of England's series WOLACI tracks the effective weighted-average interest rate across all credit card balances that are actually accruing interest. The monthly figures for 2025 show a tight range: January 2025 recorded 21.85%, April 21.45%, and November 21.60%. Published product APRs on cashback and rewards cards tend to sit above this market average because the market average blends all products and all risk bands.

Common types of credit card fees

Credit card issuers charge a range of fees beyond the purchase rate. Understanding each type helps a prospective cardholder calculate the true cost of holding and using a card.

Annual or monthly card fees

Some credit cards charge an annual or monthly fee simply for holding the card, regardless of whether it is used. These fees are typically associated with cards that offer higher cashback rates, premium travel perks such as airport lounge access, or elevated rewards earning. The fee must be factored into any assessment of whether the rewards or perks justify the cost. Cards with no annual fee are available across most credit card categories, including cashback and balance transfer products.

Balance transfer fees

A balance transfer involves moving debt from one credit card to another, typically to take advantage of a lower or 0% interest rate. The receiving card usually charges a balance transfer fee, expressed as a percentage of the amount transferred. This fee varies by issuer and product; readers should check the pre-contract credit information for the specific card being considered. A balance transfer fee reduces the effective saving from moving to a lower-rate card, so the arithmetic should be checked before proceeding.

Cash advance fees

Withdrawing cash using a credit card at an ATM or requesting a cash advance typically triggers a one-off fee, usually expressed as a percentage of the amount withdrawn, subject to a minimum. In addition, most issuers charge interest on cash advances from the date of the transaction with no interest-free grace period, even if the account balance is otherwise cleared each month. Cash advances are therefore significantly more expensive than purchases on most credit cards.

Late payment fees

A late payment fee is charged when the minimum payment due is not received by the statement due date. The Chase credit card charges £12 per late payment, as published in its credit summary box. Other issuers charge different amounts; these are disclosed in the pre-contract credit information. The FCA's Consumer Duty framework, which came into full effect in July 2023 and applies to all FCA-regulated firms, requires firms to consider whether their fee structures produce good outcomes for retail customers. Late payment fees above the level needed to cover costs could attract regulatory scrutiny under that framework.

Foreign transaction fees

Many credit cards charge a foreign transaction or currency conversion fee, typically around 2.99% of the transaction value, when a purchase is made in a foreign currency or processed through a non-UK payment system. Some cards, including the Chase credit card, charge no foreign transaction fee. This can represent a material saving for cardholders who travel frequently or make purchases from overseas retailers.

Over-limit fees

Some credit cards historically charged a fee when spending exceeded the credit limit. The Chase credit card charges no over-limit fee. The prevalence of such fees has declined, but readers should check the terms of any card being considered.

Section 75 protection: what it covers

Section 75 of the Consumer Credit Act 1974 is one of the most significant consumer protections attached to credit cards. Under Section 75, the credit card issuer is jointly and severally liable with the supplier if there is a misrepresentation or breach of contract by the supplier. This means the cardholder can make a claim against the card issuer directly if a purchase goes wrong and the supplier cannot or will not make things right.

The protection applies where a single item costs between £100 and £30,000. The full purchase price does not need to be paid on the credit card: even if only a deposit of a few pounds is charged to the card for an item costing between £100 and £30,000, the Section 75 protection applies to the full amount. This makes credit cards particularly useful for high-value purchases such as holidays, electronics, and furniture.

Section 75 does not apply to purchases made via third-party payment services where the direct creditor-supplier relationship is broken. It also does not apply to debit cards, charge cards used through a third party, or purchases made using a credit card linked to a digital wallet in all circumstances. Understanding where the protection applies and where it does not is important before relying on it.

For more context on how credit card use interacts with a credit file, see the guide to what credit utilisation means and the UK credit score guide. If a buy-now-pay-later product is being considered alongside a credit card, the article on BNPL and credit impact is also relevant. For a broader overview of credit files, see what is a credit file.

FCA regulation and Consumer Duty

All credit card issuers operating in the UK must be authorised and regulated by the Financial Conduct Authority. The FCA CONC sourcebook (CONC 3) sets the rules for credit advertising, including the representative APR disclosure requirements described above. Consumers can verify any firm's regulatory status on the FCA's Financial Services Register at register.fca.org.uk.

The Consumer Duty, which has applied to new and existing products and services since July 2023, requires firms to deliver good outcomes for retail customers across four areas: products and services, price and value, consumer understanding, and consumer support. For credit cards, this means issuers must be able to demonstrate that their products represent fair value, that communications are clear enough for the target market to understand, and that customers who find themselves in financial difficulty can access appropriate support.

The FCA's CP26/15 consultation, published April 2026, specifically reviewed the financial promotions rules for consumer credit. The consultation examined whether the current representative APR framework continues to provide meaningful consumer protection, and whether additional disclosure requirements are warranted for digital promotions. Any changes arising from that consultation will update the CONC 3 rules.

This page is for editorial and informational purposes only and does not constitute financial advice. Representative APRs shown depend on individual circumstances and are subject to status. Interest rates, fees, cashback terms and caps are subject to change; verify current terms directly with the issuer and check the FCA register at register.fca.org.uk before applying.

Q: What does representative APR mean on a credit card?

Representative APR is the Annual Percentage Rate that must be available to at least 51% of applicants who are accepted for the advertised product. It allows consumers to compare products across issuers on a standardised basis. Up to 49% of accepted applicants may be offered a higher rate depending on their individual creditworthiness.

Q: Does Section 75 apply to all credit card purchases?

Section 75 of the Consumer Credit Act 1974 applies to single-item purchases costing between £100 and £30,000 where the purchase is made directly using the credit card. It does not apply to debit cards, and its application to purchases made through third-party payment intermediaries is less straightforward. Always confirm the coverage with the card issuer before relying on Section 75 for high-value purchases.

Q: What was the average UK credit card interest rate in 2025?

The Bank of England's series WOLACI, which tracks the effective weighted-average rate on interest-charging credit card balances, recorded approximately 21.60% in November 2025. The rate fluctuated between approximately 21.42% and 21.85% across the months of 2025 for which data is available. This market-wide figure blends all lenders and risk bands, so individual product rates may be higher or lower.

Q: Are credit card fees regulated in the UK?

Credit card fees must be clearly disclosed in the pre-contract credit information (summary box) provided before a credit agreement is signed. The FCA's Consumer Duty framework requires issuers to ensure their fees represent fair value. Late payment fees, annual fees, and cash advance charges are all subject to FCA oversight under the CONC sourcebook.

Q: What triggers the need to show a representative APR in an advertisement?

Under FCA CONC 3 rules, a representative APR must appear in a credit advertisement whenever the advertisement includes "trigger" information: the amount of credit being offered, any deposit or down payment, the amount or number of repayments, or the duration of the credit agreement. Mentioning any one of these triggers requires the representative APR to be shown prominently.

Q: How do cash advance fees work on a UK credit card?

Cash advances typically incur a one-off fee (a percentage of the amount withdrawn, often with a minimum charge) plus interest that begins accruing from the date of the transaction. Unlike purchases, there is generally no interest-free grace period on cash advances. The combination of the upfront fee and immediate interest makes cash advances one of the most expensive ways to borrow on a credit card. Specific fee amounts vary by issuer and should be checked in the product's summary box.