There have been 125 fee and rate increases on credit cards in just two months, financial analysts revealed yesterday.
And another study claims the number of people being turned down for credit cards has soared, as a result of banks taking a harder line on lending to the public.
Since September, banks and finance companies have increased cash withdrawal fees on 69 credit cards, and 25 cards now carry higher interest rate charges on cash withdrawals.
Balance transfer fees
On ten cards, fees increased for people transferring balances from a different card, with some companies now charging 3%.
On three credit cards, there was a rise in the interest charged on new purchases, and customers incur higher foreign usage charges on another 18 cards, according to the personal finance industry website, Moneyfacts.co.uk. Moneyfacts.co.uk.
Which? Money Editor Martyn Hocking says: ‘ As credit card fees go up, it becomes more important than ever for consumers to shop around to find the best deals. There are still some great deals out there – for example, while many cards have increased foreign usage charges, there are still three Which? Best Buy cards – offered by the Post Office, Nationwide and Thomas Cook – that charge consumers zero fees for foreign usage.’
A separate study by finance website MoneyExpert.com claims as many as 3.27 million people had credit card applications turned down in the six months up to the end of September.
The report said just under one in ten of the 1,009 questioned had had a credit card application rejected during the period, representing 17% more than during the previous six months. Increasing levels of bad debt, as well as the problems in global credit markets, had prompted many firms to tighten their lending criteria.