Fees introduced on credit cards?

Jackswan_2

anniecave wrote: »

credit card companies do get around 2.5% of transaction value in charges off all the retailers who take them. So customers who spend lots but pay everything off each month are a good constant source of income for the card companies... that's why they will do full balance direct debits. And customers stick with them even if there are no incentives (cashback, loyalty points etc).

Credit Card companies do very well out of retailers and businesses, Barclaycard certainly do, they charge businesses a straight fee of £150 as a joining fee, the PDQ
terminal is charged at £16.95 per month, for debit cards they charge a flat fee of 34p per transaction and for credit cards it can be 1.7% per transaction, for business customers the charge for debit cards is 34p and for credit cards 1.99% there is a
minimum billing charge of £20 each month regardless of any transactions. Many businesses have more than one PDQ terminal.

harrowing_3

Jackswan wrote: »

Credit Card companies do very well out of retailers and businesses, Barclaycard certainly do, they charge businesses a straight fee of £150 as a joining fee, the PDQ
terminal is charged at £16.95 per month, for debit cards they charge a flat fee of 34p per transaction and for credit cards it can be 1.7% per transaction, for business customers the charge for debit cards is 34p and for credit cards 1.99% there is a
minimum billing charge of £20 each month regardless of any transactions. Many businesses have more than one PDQ terminal.

So why did Egg close the accounts of all those "transactors", i.e. people who pay their balance off in full every month?

Eydon

anniecave wrote: »

credit card companies do get around 2.5% of transaction value in charges off all the retailers who take them. So customers who spend lots but pay everything off each month are a good constant source of income for the card companies... that's why they will do full balance direct debits. And customers stick with them even if there are no incentives (cashback, loyalty points etc).

Not true. Merchants are charged a fee per transaction by the acquiring bank (Barclaycard and Natwest used to have around 80% of the acquiring market between them when I worked in the industry). The card issuers don't get anything from the use of the card. So people like Egg for example, who are issuer only, make their money from interest, fees and cross-selling - not from card usage.

Eydon

harrowing wrote: »

So why did Egg close the accounts of all those "transactors", i.e. people who pay their balance off in full every month?

Because Egg is a card issuer (not an acquirer) so they don't make any money from card usage - just from interest, fees and cross-selling.

harrowing_3

...tres interesse!

SmileyG_2

harrowing wrote: »

About 6 months ago (or was it longer) there was a lot of talk in the press about that Credit Card Companies would be "forced" to re-introduce annual fees. Has anyone's CC company actually done that? Mercifully, mine hasn't - it's GM Mastercard.

Amongst the many changes to their T&Cs since I took the card out, MBNA decided to introduce a "minimum interest charge" of £1.00 on my account. So although I used the card and paid off the balance each month, I lost the benefit of an interest free period.:mad:

If I used the card once each month and cleared the balance, I would still end up paying them £12.00 per annum, which I concluded is remarkably close to an annual fee that Capital One tried to charge me a couple of years ago.

Suffice to say that this, together with their inability to stop supplying me with CC cheques despite numerous requests, has propmpted me to close my account and opt for a simpler, mainstream supplier for my replacement credit card.:j

gazza975526570

does this apply to all MBNA?

harrowing_3

SmileyG wrote: »

Amongst the many changes to their T&Cs since I took the card out, MBNA decided to introduce a "minimum interest charge" of £1.00 on my account. So although I used the card and paid off the balance each month, I lost the benefit of an interest free period.:mad:

If I used the card once each month and cleared the balance, I would still end up paying them £12.00 per annum, which I concluded is remarkably close to an annual fee that Capital One tried to charge me a couple of years ago.

Suffice to say that this, together with their inability to stop supplying me with CC cheques despite numerous requests, has propmpted me to close my account and opt for a simpler, mainstream supplier for my replacement credit card.:j

It seems the charges have crept back in somewhat

SmileyG_2

gazza975526570 wrote: »

does this apply to all MBNA?

Don't know, just something to watch out for! You'll only see it if you clear your balance each month, or its in your "very small print" with your monthly statement.

This charge only appeared after they'd given me 4 months at 0%.