Beware of charges with credit cards
There are many good credit card deals around. But to enable credit card issuers to offer such good deals they have had to take a loss in order to reap benefits in the future. In order to recoup some of their losses credit card issuers are now imposing charges which is the subject of this article.
The chief beneficiary of the credit card deals in the competitive UK credit card market is the credit card holder. The plethora of 0% APR deals that allow credit card holders to transfer their outstanding balances at the end of one 0% APR deal on to another 0% APR without any penalty charges means that credit card issuers are losing money. What credit card issuers rely on is customer inertia in not switching to another 0% APR so that when the APR reverts to the standard rate approaching anything up to 18% the credit card issuers begin to recoup their losses. As credit card holders become more financially prudent the credit card issuers are looking to recoup their losses elsewhere.
One of the avenues where the credit card issuers were able to recover some of their losses was late payment charges which escalated to as much as £25.00 even if a payment was a day late. However, the Office of Fair Trading intervened following complaints and the credit card issuers are now limited to charging their credit card holders a maximum of £12.00 for each late payment. Having had this cash cow taken away from them the credit card issuers are now resorting to charging annual credit card fees, increasing the fee on a credit card balance transfer, charging low usage of credit card fees and even charging fees if a credit card has not been used for a certain period.
So, remember to check your Terms and Conditions so as not to be caught out.
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