Banks increase credit card fees

I read recently that since 1997, banks have increased their revenues on fees from credit cards by five times.

Banks are always looking for ways to satisfy their shareholders, and one of the most efficient ways of raising revenue is through fees. And that means increasing things like interest rates and annual fees on credit cards.

For me it raises the question of whether banks can justify these increases for the sake of increasing profits for what David Bell, head of the Australian Bankers' Association, calls "people who own the banks - that being mums and dads shareholders and superannuation funds."

Or does it just mean that once again it is the honest consumer that has to grin and bear the brunt of the pain?

What to look out for with low annual interest rate credit cards

In the last week or so there has been a fair bit of media coverage about the hidden costs behind allegedly 'low cost' credit cards.

With the huge number of new credit card lenders that have broken on to the market, Australian credit card holders are being warned that they may be being taken for a ride.

According to Wizard Home Loans chairman Mark Bouris, "In the last six months in particular, the credit card market has been flooded with new entrants promoting cards with seemingly cheap interest rates and tempting deals".

"However, once you scratch the surface you quickly realise that many cards come with hidden fees and costs."

Mr Bouris warned customers not to be sucked in by promotions of low-rate cards, which may have high interest rates and fees, as well as high annual card fees more than the average $100.

"The advertised low interest rate is not always what it seems," Mr Bouris said.

It's true that different fee structures can be confusing. So that's why it's so important to have as much information as possible at your fingertips where credit cards are concerned.

Get the lowdown on Australian low annual interest rate credit cards