Fees By Credit Card Companies
An economist said of one of the big international credit card companies that if they were too stop charging late fees their shares would drop in price dramatically over night. This shows the huge amount of money made by credit card companies every year by charging late fees. In fact it is thought to be hundreds of millions of pounds every year in the UK alone. If you were to take the whole world into account it would be billions of pounds. More than many small countries. In the case of many international credit card companies, this is the case.
Because of the huge success of the late charge, some credit card companies are inventing new charges. Many are introducing charges for not letting them know in time if you change your address. This has caused an out cry by consumer organisations and consumers alike. Whilst we love the convenience of credit cards we are not so keen on being charged through the nose for the convenience. A lot of cards are now charging you to use your card abroad. This is said to raise £355 million in extra revenue for the banks.
It does not stop here the purchase of gift vouchers and gambling credits will by many companies be considered a cash advance equivalent and therefore be charged at the same rate as taking cash out of the cash machine with your credit card, which is charged at a higher rate than just buying stuff on your card.
If the banks continue this mission on fees then it could cause governments to take action to stop banks charging so many fees on so many different factors of credit card use.
Credit cards these days are one of the biggest ways of lending money and also one of the most profitable. Even with just the interest they charge they make colossal profits. Due to the huge profits involved many more companies are getting in on the credit card business and fees are all part of those big profits.