This page originally appeared on Money4MedStudents
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Banks and credit card companies are notorious for having high penalty charges if you go over your overdraft limit, miss a credit card minimum payment or make a late payment. We’ve outlined some things to look out for if you are worried about penalty charges.
- It’s important to keep on top of your payments, and to know exactly how much you have in your account. Talk to your bank as soon as you can if you think you are going to exceed, or have exceeded, your overdraft limits – don’t bury your head in the sand. Seek help if you feel nervous about doing it yourself.
- Try to get your account back within its agreed limits as soon as possible, as charges can escalate with interest added on top.
- If you’re in serious financial difficulties, banks can freeze your account to prevent debts from accumulating. However, they may then demand that you repay your overdraft.
- If you’re having problems seek advice from your university advice services or Citizens Advice, online or at one of their branches.
In 2013, the Office of Fair Trading (OFT) said that credit card penalty charges are too high and ordered banks and card companies to look into reducing the charges. Check with your bank if such charges apply, and if so, how much they could cost you.
If you have incurred excessive overdraft charges or other bank fees, you could try to reclaim them or come to an arrangement with your bank, especially if you’re in financial hardship. Start by talking directly to your bank. If that doesn’t work, you might be able to get free help. The Money Advice Service has more information on trying to reclaim fees and charges.