Credit card fees rise

Credit card providers have hit consumers with 125 fees and rate hikes in the last two months.

Some 69 cards have upped their cash withdrawal fees, 25 cards have higher cash withdrawal rates, foreign usage charges are higher on 18 cards and ten cards have upped balance transfer fees, according to figures from Moneyfacts.co.uk.

Three card providers have also increased their purchase rates.

"It seems as if the credit crunch is beginning to cause credit card chaos. 125 fee and rate increases inside two months is quite staggering," said Esther James, credit card analyst at Moneyfacts.

"With the majority of increases staying away from the headline purchase rates, these fee and rate increases are less in the public view, and often tucked away in lengthy terms and conditions. However they can still make a substantial increase to the cost of using your card."

Heading up to Christmas, Britons are being warned to avoid credit cards to fund celebrations especially with cash withdrawals.

However, there are still a number of 0% deals available to help shoppers avoid high credit card interest.

"Following a year of rising rates and fees, its time to take a look at your card. Check the interest rate you are paying, as there are still some great 0% deals on purchases and balance transfers to be found. So don't pay interest unnecessarily," said Ms James.

"Make sure you look after your own pocket instead of fuelling the profits of the card providers."

But new research shows credit card rejections up were 17 per cent in the last six months, so securing a deal may be more difficult.

Figures from the payments association Apacs released today reveal there are now 74.5 million credit cards issued in the UK to 31.4 million people.

Over the last three months 1.7 billion purchases were made on plastic cards worth £86.6 billion.

In September, 156 credit and debit card purchases were made every second – with this total expected to rise markedly in the run-up to Christmas.