Late Payment and Over-Limit Charges: What's Allowed

Miss a credit card payment and the charge is almost always £12. HSBC, Chase, Vanquis, Tesco Bank, Santander, TSB, Jaja and 118 118 Money all publish £12 as their late payment fee, and Zable says it charges up to £12¹. It is the closest thing the UK card market has to a standard price.

That figure is not an accident. Independent guidance states that charges of more than £12 for missing a credit card repayment may be seen as unfair, which is why the market settled where it did¹⁵. A fee above that level is not automatically unlawful, but it gives you grounds to challenge it.

The fee is only part of the cost. A missed payment can also be reported to credit reference agencies, and one late payment on a credit card or loan can dent your score by as much as 130 points¹⁸. Some cards charge nothing at all for a late payment, and if you have been charged unfairly there are routes to get the money back.

Late payment fees: £12 is the usual charge

The £12 fee is charged when you do not make at least your minimum payment by the payment date. Santander says "we'll charge you a £12 late payment fee"¹³. Tesco Bank charges £12.00 on its Clubcard Credit Card, Premium Credit Card, purchase card and All Round card⁹. HSBC, Chase, Vanquis, 118 118 Money and Jaja all publish £12 as their late payment fee, and Zable says it charges up to £12¹.

The same figure runs through the credit-builder and specialist end of the market. Vanquis charges £12 across its Travel, Purchase, Credit Builder, Balance Transfer and Low APR Balance Transfer cards³. 118 118 Money charges £12 for late or missed repayments⁶. Jaja's Vanta card charges £12¹⁰. Zable charges up to £12 if you do not pay at least your minimum payment by the due date⁸.

The fee is per missed payment, not per month, so missing two consecutive payments normally means two fees. It is added to your balance, which means interest can be charged on it as well.

When a charge over £12 may be unfair

The £12 figure comes from a fairness benchmark rather than a legal cap. Independent guidance is consistent: "Charges of more than £12 for missing a credit card repayment may be seen as unfair"¹⁵. Experian's consumer guidance says the same, that charges of over £12 for late credit card payments may be seen as unfair¹⁷.

That matters because a charge above £12 is not banned. A provider can set a higher fee, but it has to be able to justify it as a genuine estimate of its costs rather than a penalty. If it cannot, the charge may be treated as unfair and you can challenge it.

The wider principle is that a default charge should reflect the actual administrative cost to the lender, not punish the borrower. Where a fee looks disproportionate to the work involved, that is the basis of a complaint.

The Financial Conduct Authority's credit card market study recorded commitments from the industry body then known as the UK Cards Association, including "alerting consumers at a set point of credit limit utilisation" and "allowing consumers to request a 'later than' payment date to fit with their own pay day"²⁷. Those commitments are about preventing the missed payment in the first place, which is cheaper for everyone than a refund argument afterwards.

Cards that charge no late payment fee

Not every card charges. Nationwide states: "We won't charge you a late payment fee if you don't pay your monthly minimum payment"²⁰. Its Classic Credit Card and Select Credit Card both list a late payment fee and an over limit fee of £0²¹.

Tesco Bank's Clubcard Plus Credit Card is another exception, but only for older accounts: "If you applied for your Clubcard Plus Credit Card before 21 July 2020 you will not be charged a late payment fee"²⁸. Cards applied for after that date do carry the £12 charge.

Outside credit cards, some lenders also avoid late charges. Fair Finance states it makes "no charge for late repayments or repaying early" on its personal loans²⁹.

Beyond the fee: what else a late payment can cost

The £12 is the visible part. The larger cost is usually the credit file entry. One late payment on a credit card or loan can dent your score by as much as 130 points, according to Experian¹⁸. That can affect what you are offered on mortgages, loans and other cards for months afterwards.

A missed payment can also lead to your limit being reduced. Guidance on credit-builder cards warns: "Avoid late payments, as you may be charged a fee and your credit limit reduced"³⁰. Virgin Money's card terms state that on a late payment "we will apply the late payment default charge" and "we will also let Credit Reference Agencies know you have not paid"³¹.

Interest is the other compounding cost. Extra charges are added if you miss payments, and those charges sit on the balance accruing interest³². A missed payment can also end a promotional deal, moving the whole balance to the standard rate.

Going over your limit is a separate charge from paying late. Independent guidance notes that you will usually be charged for going over your credit limit, for using the card abroad and for late payments, and that the credit agreement sets out which apply³³. HSBC's own guidance links late payment fees with damage to your credit rating³⁴.

Buy now, pay later: different fees, different rules

Buy now, pay later works on its own fee structure, and the amounts are smaller but the triggers are different. Klarna adds a £5 late payment fee for any payment made more than seven days after the due date, capped at two late payment fees per order²³. Clearpay adds a late repayment fee of £6 for each late instalment and a further £6 if the payment is still outstanding seven days later, with charges capped based on how much you have borrowed²³.

The consequences go beyond the fee. The Consumer Council states that you may be charged a penalty fee if your payments are late or if you miss a payment, and that your BNPL provider may pass information about the missed payment to credit reference agencies, which will affect your credit score³⁵. StepChange warns that you can also be charged high fees and interest if you fall behind³⁶.

Deferred payment credit, the formal name for these agreements, carries interest and extra fees if payments are not made or the full amount is not paid off in the set time³⁷. Missing payments on BNPL or a credit card can mean you end up paying more than if you had bought the item outright³⁸.

Most BNPL agreements taken out from 15 July 2026 are regulated by the Financial Conduct Authority, which brings affordability checks, access to the Financial Ombudsman Service and Section 75 protection on eligible purchases²⁴. Purchases made before that date sit under the older arrangements, though you can still start a chargeback claim with the credit card provider you used to make payments to your BNPL account³⁹.

If you have been charged: getting a fee refunded or waived

The first step is to ask. Providers have committed to alerting customers at a set point of credit limit use and to allowing customers to request a payment date that fits their pay day, and a provider that has not done either is on weaker ground when it charges you²⁷. If the fee was triggered by a bank holiday collection problem or a direct debit error, say so.

If the provider will not help, make a formal complaint in writing. The pattern for challenging unexpected charges is to write to the lender first, and if you are not happy with the response, to issue a formal complaint in writing⁴⁰. If that is not resolved, the Financial Ombudsman Service is free to consumers and can look at whether a charge was fair.

There are also specific refund rights that cover charges added because of a payment that should not have been taken. If money is taken under a continuous payment authority after you have withdrawn it, your card issuer should give you a refund, and this should include any interest or charges added to your account because the payment was taken⁴¹. If further payments are taken by mistake after you have asked for a cancellation, your card provider must refund them⁴³.

For anyone struggling with card debt more broadly, free and impartial help is available. StepChange and National Debtline both offer free debt advice, and the Financial Ombudsman Service handles unresolved complaints about card providers³⁶.