The past month has seen the introduction of an incredible 31 different fee increases by credit card companies, and consumers could end up paying millions for them.
Revealed by data analyst Moneyfacts, the charges mainly see rises in withdrawing cash and interest rates on cash withdrawals. In addition banks and building societies have increased commission on foreign use of cards and balance transfer fees have also gone up.
The biggest rise for a cash fee increase was by Alliance & Leicester who increase their rate from 2.25% to 3% just last week. Withdrawing £250 now costs £7.50 before interest. Bank of Scotland, Halifax, AA and Intelligent Finance have all pushed their rates up from 2.5% to 3%, and Nationwide, Yorkshire Building Society and Smile have increase the rate from 2% to 2.5%.
Smile gave no reasons to be cheerful in increased its cash interest rate up from 14.9% to 23.9% on the Gold Visa. Interest is applied immediately on cash withdrawals so this is particularly painful.
Amazon, the AA, Britannia, Bank of Scotland and Intelligent Finance all put up commission on foreign transactions from 2.75% to 2.95%. Now a spend of £1,000 would incur an charge of £29.50. Nationwide, the Post Office and Saga (only in the EU) are the only cards not to apply a foreign loading charge now.
As for balance transfer fees – the fees that accompany a move of a balance to another card, maybe at 0% interest – have also been on the rise. Alliance & Leicester put up its balance transfer fee from 2.25% to 3% last week, and RBS/NatWest and Tesco cards have seen the fees go up from 2% to 2.5%.
These increased charges are yet more evidence of banks and building societies trying to claw back money lost on the reduction of penalty charges, and their desperation to make more money as they feel the squeeze of the credit crunch. As usual, the consumer ends up paying.
Tags: credit, banks, interest rates, finance <BR/>
Related posts:
Tue, Nov 20, 2007
Latest News