Credit card companies make up for lost charges
November 10, 2007 by admin
Filed under News, News-Credit-Cards
Credit card companies are increasing charges, rates and fees in order to prop up their profits after a government watchdog forced them to cut penalties for exceeding credit limits.
In 2006, the Office of Fair Trading (OFT) ruled that companies could only recoup the costs they incurred by card holders going over credit limits or making late payments.
Previously, charges for such minor failings had been met with hefty fines of £25 or more, but the OFT ruling forced the industry to cut charges by around 50 per cent.
However, personal finance analyst Defaqto has claimed that the credit card companies are making up for this lost source of revenue by other means.
“Credit-card providers have lost a great deal of highly profitable revenue because of the charges cap and will inevitably seek ways to replace their lost income,” principal banking consultant David Black warned.
Amongst the new kinds of charge credit card firms are levying are charges for under-use of cards and for failure to notify them of a change of address. At the same time, familiar old fees have been boosted.


