In a ruling on credit cards, the Office of Fair Trading said charges should not exceed a 'fair' level of £12.

The consumer watchdog claimed consumers are being ripped off to the tune of £300m a year by unlawful penalties on credit card charges. The charge of £12 is less than half the fee most card issuers currently impose on customers.

Default charges are levied by card providers if customers are late with minimum repayments, exceed their credit limit or make repayments by cheque or direct debits which are not honoured.

Credit card companies have been raising the fees they charge in recent years as they struggle with the loss of revenue caused by customers chasing 0% deals.

The OFT insisted that a default charge can only be used to recover certain administration costs, such as the staff and stationary costs of dealing with the default. They ruled that card companies and stores shouldn't charge more than £12 for any default charges, and would have to provide substantial evidence if it did.

If you have ever defaulted on your credit card we can help you claim back those credit card penalty charges for things like failing to pay your minimum payment, making your monthly payment late or exceeding your credit limit.