Has your credit card company increased your charges?

October 17, 2007

If you own a credit card you will be only too aware that the charges on the card are changed fairly regularly. It could be that your monthly bill has come and you now are left wondering why fees were charged for various things.

The truth is that credit card issuers are always on the lookout to make money. Since the rules changed and they had to lower their fees for late payments, other fees have gradually been introduced. Fees such as balance transfer fees have increased by an average 0.5% over the last year.

The reason credit card providers are charging these fees is because so many people are taking advantage of the balance transfer deals that are available. This is causing the providers to lose out on potentially a lot of money and so they are wising up to it and charging a fee to make up for it.

It is thought that out of all of the credit cards, 160 of them offer the option to switch balances from one card to the other. For this transaction the fee various from almost 2% to 3% of the amount of the balance transfer. So an example of the fees you could expect to pay include if you transfer around £5,000 you could end up with roughly £150 worth of fees to pay. That is quite a lot of money and for most people £5,000 is about the right amount of money that they transfer over.

For this reason it is advised that you look carefully at the transfer fees and that you see which card has a cheaper rate. Some cards may not charge you a fee at all, but generally most will. So look at the different charges and make your mind up based upon what would be cheaper for you. It really could save you potentially a lot of money if you do things properly.