Credit Card Rates On The Rise
News that the average credit card rate of interest has breached the 25% per annum level will not surprise many in the market, but under the surface the companies have also been increasing other charges associated with their services. One area which has come in for particular attention is the money withdrawal service which allows credit card holders to withdraw cash and add the figure to their credit card balance.
As the economy continues to struggle, more and more people are using this cash withdrawal service as a last resort to make ends meet. However, few will be aware that not only will they be charged anywhere from 26.2% to 46% interest on the figure withdrawn, but this will remain on their cards until all other credit card purchases are settled. So while many will assume they are being charged the basic interest rate on their balance, this may not be the case.
Analysts suggest that many credit card companies are looking to increase their income and make up for the recent regulatory review which criticised credit card charges and instigated new guidelines. This change alone has cost the credit card industry hundreds of millions of pounds in lost income, income which they are looking to make up elsewhere.
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