Higher Credit Card Fees for UK Customers
The UK market is reacting to the recent credit crunches that have been going on not only in the US, but around the world. This reaction is causing higher credit card fees for the consumers or a complete refusal of credit. In the last two months there have been 125 fee and rate increases across the boards in the market. It seems that the credit crisis is really beginning to affect the UK consumer.
These fee hikes are beginning to cause fear among the consumers as well as the banks. The consumers are struggling to pay off the existing debt as well as the new fees. This makes it even more difficult for the consumers to actually function. Most consumers will begin to have default of debt due to the higher fees. The fact is the credit card fees are at a record high and are continuing to rise. The Bank of England has many concerns over the latest in a series of credit card fee increases. They have had to show the full extent of their loses and write down many sub prime mortgages. While the sub prime mortgages have been in the US it is still taking a toll on the UK market, to where the UK consumers are suffering.
One of the most recent increases in credit card fees has been the cash withdrawals. The cash withdrawals have increased on 69 credit cards and there are 25 more that are going to increase the interest rate they are currently charging. It seems that there have also been 18 credit cards to increase the foreign usage charges for consumers purchasing out of country. 10 credit cards are pushing for higher balance transfer fees and three have increased the interest on purchases. If you think you are safe you should also be aware that many of the cards listed above have increased in a combination of these new fees. That means the consumers are suffering not only from increased interest with the card they have, but also from higher balance transfers and foreign usage charges. Halifax is just one of the credit cards that have issued an increase of 3 percent on withdrawal sums, 2.5 percent on all cards and the interest charged for cash, and a 23.95 percent increase on their charity credit cards.
Halifax is just one example of the credit card companies increasing the fees. It is actually a nationwide increase that is affecting a great deal of consumers. The Gold and Comic Relief Visa has seen an increase as have the American Express card holders. The rates are going to vary from 2 percent to 3 percent on cash withdrawals, and an increase of 22.9 or more on the interest rates being charged.
Rejections have also increased due to the credit crunch. There has been a 17 percent increase on the rejections of credit cards being offered. This means about 3.27 million consumers since September have been refused credit cards. The lenders believe that by reducing the amount of credit offered they may be able to save their businesses from the credit crunch.
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