Credit card firms have resorted to small-print tactics to claw back
money lost as a result of being forced to cap penalty fees, it was
Moneyfacts.co.uk said banks and other card providers suffered a huge
loss of revenue as a result of the Office of Fair Trading’s (OFT)
decision to limit charges and that many were now trying to pass the cost
on to the consumer.
In the last two weeks alone, six credit card issuers have made major
changes to some or all of their cards in a bid to recoup losses, the
price comparison website found.
Michelle Slade, personal finance analyst at Moneyfacts.co.uk, said:
‘Battling with rising bad debts, Bank of England rate increase and a
huge loss in revenue from the capping of default fees, credit card
providers have been forced to look for other ways to maintain their
Changes made over the last few weeks include interest rate increases –
in some cases by as much as 10% on cash transactions – to the shortening
of interest free deal periods.
Moneyfacts said that delving further into the small print of terms and
conditions uncovers rising cash withdrawal fees and foreign usage
charges, and requirements to make purchases as part of 0% balance
Ms Slade said the most significant change – and the one that could
potentially catch most customers unaware – had come from Lloyds TSB.
To qualify for the bank’s Gold or Platinum MasterCard with a full nine
months 0%, customers are required to make a purchase of 100GBP on their
card within the first three months.
Moneyfacts.co.uk noted that because the cheapest debt – the balance
transfer – will be repaid first when monthly repayments are made,
purchases will be immediately subject to interest and the card holder
will never be able to take advantage of an interest-free balance
Ms Slade said: ‘With fees and rates increasing and providers becoming
more ‘creative’ with their terms and conditions, it is more and more
important for consumers to fully understand any credit card deal before
She added: ‘I wonder if the Office of Fair Trading knew or appreciated
the consequences of their default fee capping actions, as now many more
borrowers are being hit by higher rates and fees, whilst those who abuse
their credit facility are let off more lightly.’