Credit cards have ‘new’ charges, warns Defaqto

Credit card providers are inventing new charges and increasing rates to make up for lost income, claims Defaqto.

The financial research company says the new fees are a way of issuers recouping revenue following a move by the Office of Fair Trading to cap default payments such as late payment fees.

There has been a 57 per cent rise in new or increased charges for introductory balance transfer fees between June 2006 and November this year. According to the company, not all increases can be attributed to the rise in the Bank of England base rate.

“This is even more imperative for the largest institutions because of the pressure on them arising from the knock-on effects of the sub-prime lending crisis,” said David Black, principal consultant of banking at the firm and author of the report.

He explained that over the medium-term credit cards will become increasingly expensive to use.

Defaqto’s statement follows an announcement by Moneyfacts.co.uk that there have been 125 fee and rate increases over the last three months.

© Adfero Ltd

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