Additional charges from credit card companies

12/06/2007

Credit card firms are trying different ways to make money from card holders, however The Office of Fair Trading in reverse are making a limit on penalty fees.

People who buy gift vouchers or choose to gamble online will be charged a fee.

Due to the new invention of Chip and Pin, it has increased the usage of cash withdrawals. During 2006, nearly £8.22 bn was withdrawn from cash machines using a credit card.

Cash withdrawal fees have risen to about 2.5 per cent, leaving credit card companies a figure of £2.05 million (profit) not including interest. APR has also increased to 21.27 per cent to 23.48 per cent since November 2006.

Since the penalty was capped at £12, credit card companies are trying their best to recover millions of pounds they lost. Credit card companies try adding new rules discreetly on their terms and conditions, however it is just a way to confuse cardholders.

The popular credit card of all is the Platinum MasterCard; this has a cash withdrawal interest rate of 27.9%, while its rate for purchases is only 15.9%.