Watch out for an increase in charges from credit card issuers

Credit card companies are facing a huge loss in revenue through the course of the past 5 years. With revenue practically splitting in half, credit card companies find themselves about £1 billion in the red.

The biggest problems credit card issuers face are:

• People who swap debts from one card to another that has an introductory deal of 0%; this costs companies about £600 million a year.
• With the national debt rising people are having troubles to meet their monthly payments.
• The Office of Fair Trading (OFT) is forcing companies to reduce the fines for late or missing payments and unauthorised borrowing to a £12 fee per offense from the original £20-£25.

Companies now need an extra £32 a year from each credit-card holder in the UK which means customers need to keep their eyes peeled for ploys for extra money companies may imply.

What to look out for….

Higher:

• Fees for cash withdrawals
• avoid this by never using credit cards to take out cash.
• Interest rates
• with the new 5% from the Bank of England, expect card’s APR to rise.
• Premiums for payment protection insurance (PPI)
• avoid PPIs altogether, in the long run it’s not worth it.
• Balance-transfer fees
• expect to pay up to 3% per transfer.
• Foreign transactions
• when overseas avoid this by paying with cards that don’t add up the foreign-currency fees.
  

Less:

• Cash back and reward programmes
• Interest-free periods

Implementing:

• Annual fees
• keep an eye on your statements to see if your company tries to sneak in an annual fee.
• Extraneous add-ons
• avoid unnecessary charges.

MyvestaUK