/ Money

Why is it so hard to get a decent credit card deal?

Woman with credit card

The old credit card waterbed is back in action. Just as new rules come in that press down on excessive interest payments in one place, we start to see charges popping up elsewhere and penalty rules tightening.

On the plus side, there’s been some great news about credit cards for consumers lately.

The number of competitive deals has been increasing, while the positive order of payment rules (introduced in December) means that your most expensive debt is paid off first.

Sounds unimportant, but it could mean a saving of hundreds of pounds for anyone who has transferred a balance at 0% then used their credit card for new purchases or withdrawing cash.

Unfair increases and added extras

On the downside, though, we’ve had an increasing number of complaints from customers who have had their credit card interest rate increased for no obvious reason.

When challenged for an explanation, credit card companies are replying with variations on, ‘We’ve reassessed your credit rating – check your credit file for details’. In other words, a corporate ‘Nothing to do with me guv, it’s all external factors’.

As we reported last week, there’s a new EU rule coming in next month that means only 51% of successful applicants for a new credit card have to be offered the advertised APR, down from two-thirds previously.

And that’s if you get approved at all – anecdotal evidence suggests that only those with a perfect credit report will be accepted for the best deals. Many of the rest will be encouraged onto near- and sub-prime cards with APRs of well over 20%.

Then there are fees. Recent weeks have seen Santander, for example, introducing a dormancy fee on its Debenhams credit card if you haven’t used it for six months. And with the PPI cash cow now all but dead, it seems that some banks are pushing expensive and usually unnecessary ID fraud protection instead, while others increase their charges for using your card abroad.

How can credit card providers improve?

Have you spotted any other changes to the credit card market? How does your credit card provider squeeze those extra pennies out of you? Let us know and we’ll investigate.

I’d love to hear about any positive changes, yet all too often fees and charges in the credit card market are like the Lernean hydra – chop off one head and it grows two in its place. Mixed metaphors aside, it’s unfair for credit card companies to give with one hand and take with the other and we must be on our guard.



I always understood that if you pay all of your credit card balance every month – there is no charge and in effect the banks allows an interest free loan for some 20 days or so – seems fair..

To me that is excellent – and how I use my credit card. Only once did I forget to pay for one month – never again. I now always pay on the same day every month to make it easy to remember.

I live within my means – That was what I was taught to do. .

All other transactions I use my debit card – which has a no charge overdraft facility of £250.

I never use store charge cards – They have always been expensive ever since I knew about them.

As far as I can tell I’ve never been squeezed for extra pennies – no debt no charge.

pickle says:
30 January 2011

Like Richard, I always pay the full amount each month. What concerns me is that getting money from ATMs abroad now entails an additional charge. Previously I have used my Nationwide card for getting money and purchases abroad – that now means extra charges.
I believe Saga still has a ‘no charges abroad’ policy – so I hope to change to them.

Like the others I pay off mine each months so the Nectar points I am getting costs them money not me. 8000 last month

Mark B says:
18 March 2011

I am furious. I took out a Debenhams credit card because I thought I’d spend a lot in their stores and online. Their arrangement with Santander is rubbish and completely frustrating. I must have spent pounds trying to talk to someone on their 10p per minute line:
1) they didnt send me a bill for 2 months – I had to request one
2) when I got the bill for £224.10 I made what I thought was the full payment via their phone payment system. Unfortunately I transposed the last two figures so I was 9p short. So on my following statement I had a debit balance of £6.15 – a grand total of £6.06 interest for the sake of 9p!!!!!!
3) I have paid it and am cancelling my account but have to phone back again in 2 days, as if I don’t cancel I read in the small print that if I don’t use it for 6 months I will be charged or if I put in a credit balance no matter how small, I will get charged!!!!

All of this adds up to absolutely no care or thought for me as a customer. I think Debenhams and other retailers need to change the way banks like Santander looks after their customers. I’ve complained to Debenhams to see what happens, but I thought I’d have a little rant here to some people on my side too.