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"Credit card firms continue to find ways to fleece customers"

By admin | June 2nd, 2009 | Credit Cards

According to a recent report many credit card providers are continuing to find ways to fleece their customers financially, despite pledging to act more fairly following calls from government officials and campaigners.

Industry officials claim that credit card firms have found a number of sneaky ways to get more money from their customers, and some have also hiked up their interest rates by a significant level, despite the fact that the base interest rate in the UK has fallen to its lowest level in history, at just 0.5 percent.

Many credit card firms have applied increases on withdrawing cash on credit cards, making purchases on cards, and even for balance transfers.

All of this has resulted in credit card customers having to pay out a fortune on their borrowing in what has become a very difficult financial climate. Over the past year some credit card firms have hiked up their rates by around 4 percent, and even more in some cases, which has pushed up the cost of credit card borrowing enormously for some credit card users.

Industry officials are particularly concerned that credit card firms have increased their rates at a time when many people are already struggling financially due to the credit crunch and recession, and at a time when more people are relying on their credit cards to get by.

One official said: ‘At a time when we’re all feeling the pinch, it’s hugely disappointing that credit card companies are choosing to put the squeeze on borrowers more than ever.’

Another official said: ‘This really is a case of the rise and rise of credit card charges. Even when we started monitoring average credit card fees they were already around 16% – so to see them continue to increase is testament to how much the card companies feel they can get away with. Credit is just like cigarettes and alcohol – it has become a highly sought after commodity and that means prices will go up until we’ve had enough. However, banks must be worrying whether they will ever actually get their money back anyway. Having charged so much interest many borrowers have been left with bills they simply cannot afford to repay.’

Tags: credit card interest rates, credit card charges

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