Wednesday 29th August 2007
Credit card providers are finding new ways to charge customers, following a crackdown on penalty charges, a consumer group has warned.
Which? found that credit cards now come with a range of new ways for providers to extract cash from customers, including annual fees, penalties for low-usage and higher balance transfer costs, after the Office of Fair Trading (OFT) ruled in April that the charges imposed when customers failed to make the minimum payment on their bill were unfair.
Providers were forced to cut their default charges to £12 pounds or less, but are making up for the loss in other areas, according to Which?
Which? editor, Martyn Hocking, said: "Credit card providers seem to be resorting to a raft of ingenious methods to recoup lost revenue following the OFT crackdown on penalty fees."
Northern Rock now charges £2 per month for its base rate tracker credit card, the Co-op £2 per month for its Platinum Visa credit card, while Lloyds TSB has imposed a £35 penalty on some customers who have not used their card for some time.
Barclaycard is also expected impose £10 to £20 fines on its one million 'inactive' customers.
The cost of switching a balance from one card to another has also risen from around two per cent to between 2.5 and three per cent.
Another tactic is cheaper debts to be repaid first, while loans at higher interest rates are left to wait, and grow in the meantime.
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Credit cards
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