Credit card companies impose series of fee hikes : Credit Card Guide

Credit card companies impose series of fee hikes

In a shocking recent report it has been revealed that credit card companies have imposed a series of over thirty fee and rate hikes over the past month.

British pound coins

These rate hikes could cost consumers millions of pounds collectively, and the hikes were recently revealed by Moneyfacts. Rises in cash interest rates and for cash withdrawals have been identified as the main source of the fee hikes. Banks and building societies have also joined in with the chance to make more money by increasing balance transfer fees and foreign usage commission.

The Alliance and Leicester has been found to have introduced the largest hike, having raised its cash fees from 2.25% to 3%, which means that a withdrawal of £250 will cost £7.50. A number of other providers have raised rates by 0.5% and this includes the AA, Bank of Scotland, Halifax, Intelligent Finance, Nationwide, Smile and Yorkshire Building Society. Smile has imposed a whopping rise on its cash rate on the Gold Visa, which has rocketed from 14.9% to 23.9%.

One credit card customer, who was shocked by the different rate rises that have been imposed, stated: "I have a number of different cards from a variety of providers. After hearing about all of these different rate and fee rises I feel frightened to use any of them for fear of the charges that I will have to pay. It’s got to the point where I am thinking of taking out a loan to pay off all of my credit card and then getting rid of them altogether."

Credit card companies have been striving to find different ways to make money from customers after financial regulators imposed a ceiling limit on the amount that they could charge for late and missed payments last year, with the limit set at £12. Previously some card provider had been charging in excess of £30 per fee.

Tom Smith
7th November 2007

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