In light of the Office of Fair Trading’s ruling last year – which restricted the amount that credit card companies can charge their customers for defaulting on payments and breeching other agreements – Which? Money has warned that providers are now implementing other charges to recoup their lost profits.
Now that the charges have been restricted to £12, many credit card holders have claimed back the charges that they were subjected to, which has left credit card companies out of pocket; according to Office of Fair Trading, they were making a profit of more than £300 million a year from unfair credit card charges.
The credit card companies have started to recoup their profits in a range of other ways, such as annual fees, charging for low usage, lowering minimum payments so people pay more interest, charging higher fees for withdrawing cash, and fees for balance transfers.
“Credit card providers seem to be resorting to a raft of ingenious methods to recoup lost revenue following the OFT crackdown on penalty fees.†says Martyn Hocking, Editor at Which? Money.
To avoid these charges as much as possible, Which? Money recommends consumers “always check the small print to make sure you know what charges apply.â€
