Credit card companies fail to be transparent over fees

January 30, 2007

Credit cards have once again come under fire due to the fact that they fail to tell consumers exactly what it is that they are letting themselves in for. Most people simply do not have a clue what they are applying for as the creditors do not inform them about certain traps that are hidden within the agreement.

These traps include extremely high fees for late payments and hidden telephone charges if you decide to pay your balance off over the phone. There is also an extremely cunning way that creditors get money from their consumers and that is through double-cycle billing. Now, many people have never even heard of the phrase before so how are they going to know what it means to them when taking out a credit card?

Well, basically double-cycle billing is where you could pay off most of your balance for example £60 out of a £80 balance. However, the creditors will charge you interest on all £80 the following month, despite the fact that you have paid most of it off. It may not make sense but that is how creditors do make a lot of their money.

The argument is that if most people do want to fully understand their credit card agreements, they would need a lawyer to properly understand it. Obviously this is juts not good enough and credit card companies are now having a lot of pressure put onto them in order to make their terms and conditions a lot easier to understand.

Credit card companies know what they are doing and they even spend a lot of their time advertising and targeting people such as students, the military and the elderly. All are groups of people who are more likely to fall for these hidden traps in the agreement.