Which? reports on fees charged by credit card companies
October 9, 2007
The consumer campaign group, Which?, has stated that credit card companies have hiked up the cost of using credit cards by huge amounts over the past year in order to try and recoup the losses that resulted from a cap being placed on penalty fees charged to customers’ accounts.
The Office of Fair Trading brought in new regulations last year that meant credit card companies could charge no more than £12 per fee for late and missed repayments, which was a drastic reduction to the amount that some card companies had been charging. This resulted in massive financial losses for many credit card companies.
Which? has now highlighted ten of the changes that credit card companies have made to increase the cost of using credit cards for customers. The consumer campaign group claimed that some of the methods that had been employed by some credit card companies to increase profits were ‘ingenious’. Amongst the ten changes that were listed by Which? were fees charged for low usage on cards, annual fees being introduced or increased on some credit cards, and increased cash withdrawal fees.
One official from Which? stated: “Credit card providers seem to be resorting to a raft of ingenious methods to recoup lost revenue following the OFT crackdown on penalty fees.”
However, credit card companies have stated that following the cap on penalty fees a range of different fees was bound to be introduced, and these companies have denied that they are acting unfairly through the use of such methods.
Sandra Quinn from APACS stated: “We always said that charges would change as a result of the OFT ruling. We have been much more upfront about how charges are applied - every statement now has a summary box listing charges and key information about charging,”
Alan Wright
9th October 2007
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