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CREDIT CARD TRICKS Take Out Cash
Blog Post Date: Feb 25 2010
CREDIT CARD TRICKS
By Kate Mansey
50 percent extra to take out cash
Credit card companies are utilizing crafty tricks to rip off customers - as shock numbers show Britons owe £54.5 billion to our "flexible friends".
A Sunday Mirror investigation showed some consumers can end up paying up to £150 for each £100 of card debt.
Firms add underhanded charges, fees and penalties to bills, send out credit card cheques at higher rates - and increase credit limits without your agreement.
Money expert James Daley said: "They encourage debt. MBNA roll out letters advertising a service to transfer cash from your credit card to your current account, making it seem like a good idea - when, in fact, there will be a much higher rate of interest on that debt."
Peter Harrison, credit card expert at Moneysupermarket.com, said: "A late payment will have a covered fee of £12, which does not sound bad, but late payment could mean your promotional interest rate is gone." Vanquis, which offers cards to people with poor credit history, charges up to 50% interest for cash advances - and even Barclaycard charges 27.9% to use its credit card cheques.
It was revealed this week that credit cards now charge an average 18.8 percent interest, while the Bank of England base rate remains at a 300-year low of 0.5 percent.
The bank figures released this month revealed we currently owe £54.5billion on our cards. Angry consumer groups want more transparent rules on card costs.
Marc Gander of the Consumer Action Group said: "We've seen a large number of people in trouble thanks to credit card tricks. People get into debt then find they are stung for much more interest than they expected. It's disgraceful."
How to beat big charges
Pay at least the minimum payments or you could lose your promotional interest rate.If you have paid off a credit card make sure you cancel it or it could impact your credit rating.
It's good to shop around; transfer a big balance to a card with an interest-free rate. But don't move and change too much as it could affect your credit rating.
If transferring a debt, make sure the card has the same low rate for purchases - or get another card that does.
Don't make a cheque from a credit card - you'll get a cheaper interest rate with a bank loan.
VIA Mirror News
Keyword: Credit Card
By Kate Mansey
50 percent extra to take out cash
Credit card companies are utilizing crafty tricks to rip off customers - as shock numbers show Britons owe £54.5 billion to our "flexible friends".
A Sunday Mirror investigation showed some consumers can end up paying up to £150 for each £100 of card debt.
Firms add underhanded charges, fees and penalties to bills, send out credit card cheques at higher rates - and increase credit limits without your agreement.
Money expert James Daley said: "They encourage debt. MBNA roll out letters advertising a service to transfer cash from your credit card to your current account, making it seem like a good idea - when, in fact, there will be a much higher rate of interest on that debt."
Peter Harrison, credit card expert at Moneysupermarket.com, said: "A late payment will have a covered fee of £12, which does not sound bad, but late payment could mean your promotional interest rate is gone." Vanquis, which offers cards to people with poor credit history, charges up to 50% interest for cash advances - and even Barclaycard charges 27.9% to use its credit card cheques.
It was revealed this week that credit cards now charge an average 18.8 percent interest, while the Bank of England base rate remains at a 300-year low of 0.5 percent.
The bank figures released this month revealed we currently owe £54.5billion on our cards. Angry consumer groups want more transparent rules on card costs.
Marc Gander of the Consumer Action Group said: "We've seen a large number of people in trouble thanks to credit card tricks. People get into debt then find they are stung for much more interest than they expected. It's disgraceful."
How to beat big charges
Pay at least the minimum payments or you could lose your promotional interest rate.If you have paid off a credit card make sure you cancel it or it could impact your credit rating.
It's good to shop around; transfer a big balance to a card with an interest-free rate. But don't move and change too much as it could affect your credit rating.
If transferring a debt, make sure the card has the same low rate for purchases - or get another card that does.
Don't make a cheque from a credit card - you'll get a cheaper interest rate with a bank loan.
VIA Mirror News
Keyword: Credit Card
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