Credit Card Fees Shoot Up
Watch out -- credit card fees are shooting up all over the place.
The fees charged by credit card companies for several services have jumped in recent weeks, new research has revealed.
In their efforts to get their mitts on our money, credit card firms have introduced over 30 fee hikes since September. According to figures from analysts Moneyfacts, those making cash withdrawals are likely to find their wallets hardest hit.
Alliance & Leicester's fee for withdrawing cash using a credit card zoomed up the most, from 2.25% to 3% just last week. This means those withdrawing £200 in this way will now pay a £6 fee.
And many other major lenders -- including Bank of Scotland, Halifax, the Co-operative Bank, Nationwide and Yorkshire Building Society -- have imposed recent hikes of 0.5%.
Interest rates on cash withdrawals for many credit cards have also shot up in the last two months. Smile current account holders with a Gold Visa Card saw their rate rise from 14.9% to 23.9%, while the rate for Yorkshire Building Society customers with a Classic Card ballooned from 15.4% to 23.9%.
There's also depressing news for credit card holders who want to transfer debt to a 0% balance transfer card. Alliance & Leicester was a baddie in this respect, too -- in the last week its balance transfer fee rose from 2.25% to 3%*. However, other big-name lenders have been at it as well: NatWest, Royal Bank of Scotland and Tesco Personal Finance all hiked their fees from 2% to 2.5% in the last couple of months.
And before you pack your bags and leave the country, it's worth checking which plastic you plan to use abroad. The Bank of Scotland, Britannia Building Society, Intelligent Finance, the AA and Amazon have all upped the commission applied to foreign transactions - from 2.75% to 2.95%.
So what's the excuse for all these fee hikes? Following the fuss this year about unfair penalty charges for credit cards and overdrafts, the credit card providers are looking for other ways to fill their coffers.
But it's not all doom and gloom -- thankfully you can dodge many of these fees. Withdrawing cash using your credit card is incredibly expensive -- and there's no interest-free period - so try to avoid doing so at all costs.
For tips on making your credit card work for you, have a look at Why Cash And Credit Cards Don't Mix! or 12 Ways Your Credit Card Rips You Off!.
* This doesn't mean that Alliance & Leicester rates are now higher than everyone else's. Until the recent rise, the A & L fee for cash withdrawal was cheaper than many of its counterparts.