19 May 2005
Credit card users may end up having to pay charges simply for making purchases with their credit cards, as credit card companies try to generate revenue.
Researchers have revealed that the customary practice of not charging credit card customers interest for between 45 and 59 days if they clear their full balance every month is under threat.
Some credit card companies have started to charge interest from the moment a transaction is made using the card, no matter when payment is received, and this method increasing revenue is expected to spread.
"Credit card companies are struggling to make money thanks to the so-called 'rate tarts' who switch from special deal to special deal. Analysts believe they cost the industry at least £80 million a month or £1 billion a year," said financial expert Sean Gardner.
He added: "So it's no surprise that firms are coming up with ways to ensure they make some money at least out of their customers. We've seen it with charges for transferring balances and cutting interest-free periods is another way of ensuring they make money."
However, these new types of interest-charging cards could actually suit those who normally carry a balance on their card, because the rates are actually more reasonable than some others.
Use uSwitch's impartial credit card calculator to compare all credit cards and find the card to suit your needs.
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