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Credit card costs climbing

Thu, 17 Apr 2008

According to recent reports in the credit card news, the cost of using credit cards has climbed in the last two years. Moneyfacts indicate that purchase rates have climbed rapidly, as have the average rates for taking out cash .

The Office of Fair Trading forced banks to cut credit card default fees just two years ago, but it seems that many providers are making up profits by increasing rates. One-off fees for taking out cash have also climbed.

Michelle Slade of financial information site Moneyfacts reportedly commented: "Taking cash out on credit cards has always been an expensive way of borrowing, particularly as interest is charged from day one. But with the 6.2% increase in the average rate for customers who are relying on cash advances to balance their monthly budget, it will make a bad situation even worse."

Many banks have increased basic charges and fees, as well as introducing annual fees. Despite this, charges are clearly shown on bank statements, and being able to switch between 0 per cent interest deals can work in the favour of customers.
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