Credit card issuers are very sneaky. If you don't want to get taken to the cleaners, be aware of their sly tricks.
Yesterday, I received two innocent-looking letters from my credit card company (to disguise its identity, I'll call it
MNBA). These letters informed me of certain 'changes to my account terms and conditions'. As usual, in order to reduce the risk that I might actually read and understand the changes, they were buried away in super-fine-print on the back page of the accompanying brochure!
What's more, to throw even more customers off the scent, most of said brochure was taken up by flowery information on the benefits offered to cardholders and describing how wonderful MNBA's service is -- yeah, right. To MNBA, and many other card issuers, we say, "shame on you and your devious, false-hearted marketing!"
What makes my blood boil is that MNBA has increased several charges that I already consider to be extortionate. Here's what I mean:
1. The charges for late payments, returned payments and exceeding one's credit limit have gone up from £20 to £25. These charges hugely exceed the amount of work that MNBA puts into resolving these situations (as you know, it's 'all done by computer these days'). In addition, several leading barristers believe that punitive penalties of this kind breach the Unfair Terms in Consumer Contracts legislation and, therefore, could be outlawed at some point soon. Don't pay these penalties: if you have a genuine excuse, keep complaining until you get them back!
2. Unlike many other card issuers, MNBA normally charges a handling fee for arranging balance transfers or processing credit card cheques, unless you convince it otherwise. Its fee is 2% of the transaction (minimum £2), which amounts to £100 on a £5,000 transfer. This is ridiculously steep -- my advice would be not to use these features at all with MNBA cards, unless it agrees to waive this charge every time.
3. If you make a transaction in a currency other than sterling, MNBA slaps a commission of 2.75% on top of its unattractive exchange rate spread. Again, this smacks of profiteering: Nationwide Building Society, for example, doesn't charge this fee on its credit cards.
4. MNBA is extending the age limit for its payment protection insurance from 65 to 70. The actual cost of this change would absolutely microscopic, but MNBA is raising premiums across the board.
As it stands, MNBA's policy is absurdly, ludicrously, unbelievably expensive: a monthly charge of 0.68% of your balance. If you make a claim, MNBA will pay you just 3% of your balance per month. I'll leave out the maths, but this means that a benefit of £100 costs you £22.67 in premiums. So, unless you're guaranteed to be out of work due to unexpected accident, sickness or unemployment for at least three months of every year, this protection is utterly worthless -- you're better off self-insuring!
I've picked on MNBA because it just happened to write to me this week, but the same criticisms apply to almost all credit card issuers. If you get a letter from one, read it carefully, because you're guaranteed to get caught out if you don't!
More: Find a better Credit Card | Weapons Of Money Destruction! | Cunning Credit Card Conduct.
