How Credit Card Companies Are Making Millions Just By Overcharging

Feb 4 at 3:03pm by Personal Finance Claims

At times, credit cards come in very handy that you  may feel  the credit card companies are  providing a social service for their customers. Well, you are not entirely wrong in your assumptions because many other credit card users including me sincerely believe that credit cards are in fact a blessing. So, if you were thinking that I was here to belittle the usability of credit cards then I must admit that you have been gravely mistaken.

You may not realise this, but my real purpose is just to make you aware about the ongoing credit card overcharging  that has generated plenty of  publicity against credit card companies in recent times. Not that card companies are doing something illegal, but the  overcharging has reached monolithic proportions . 

 Credit card users  may be forced to pay a late payment fee that is  may be quite high in cases. What has helped these companies to earn even more has been the increase in the number of cases related to credit card defaults. You multiply the high late payment fee with the total number of defaults and you will come to know exactly how these card companies are making their millions.

Statistical data as required for such calculations is easily available and from what I have researched so far, it clearly shows that around eleven percent of all credit card holders have defaulted. This may not seem much, but when you translate 11 percent into actual number of defaulters, you will see that it comes to a staggering five million people. And considering that the average late payment charge is around £12, it will not take you long to calculate the millions in profits that credit card companies are raking in every year at the expense of their customers.

“So, what do I do to avoid such high charges”? Well, the most appropriate thing to do would be to curtail your credit card usage, but since this is often not possible, I would recommend that you search for a credit card company that might have the most affordable rates and the most favourable terms and conditions on offer. However, if you have already defaulted and have been charged accordingly, then you might have to file a claim with your credit card company so as to reclaim the excess amount charged to your account. You also have the option to go to the courts, if unfortunately nothing works out in your favour.

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credit cards, credit card overcharges, credit card overcharging