Credit card companies make up for lost charges

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.

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UK consumers struggle to remember pin codes

Research from high street bank Abbey has today revealed that consumers have trouble remembering their pin codes.

Fully 39 per cent of those polled by the card provider said that they write down their numbers so as not to forget them – although a big majority of this group disguised them in some way.

Making records of pin codes makes credit card fraud far more likely, as does making all cards carry the same code, as admitted to by 14 per cent of respondents.

Around 55 per cent admitted to having forgotten a number, with card holders increasingly owning more than one piece of plastic.

The survey found that six million Britons hold three cards, around three million hold four, and two million hold five cards or more.

Steve Shore, head of banking at Abbey, said that with many consumers holding multiple cards, “the challenge of remembering all those PIN codes is getting greater.

“But we really do urge you to try and commit them to memory rather than write them down. Otherwise it’s like signing a blank cheque for fraudsters.”

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Holidaying card holders should keep record of helplines

Credit card helplines provide essential customer protection against fraud, payments association Apacs said yesterday.

This advice especially applies to those intending to use credit cards on holiday this summer, with the trade association recommending that a copy of the helpline numbers always be to hand so that providers can be quickly notified if their card is stolen.

Holidaymakers were also advised to cut down the amount of cards taken with them to a minimum.

A spokesperson for Apacs said: “I think if you’ve got a lot of store cards or five credit cards then you don’t need to take all of them. So minimise your chances of fraud. Look after them. Frighteningly, people don’t.

“Before you go, make a note of the 24-hour helplines of the card companies. So if something does happen, you’re not then searching who to phone; you’ve always got that number with you.”

The spokesperson also noted that increasing numbers of tourists are using their cards in place of traveller’s cheques because of convenience, despite the inherent risk of fraud that comes with their use.

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