Stealth Credit Card Charges in New Year

06/12/2007

Customers of Royal Bank of Scotland (RBS) and its subsidiary Natwest are advised not to hit the credit card too strongly this New Year’s Eve. The very next day their interest-free period will be reduced, even if they settle their balanced in full every month.

From 1st January, many RBS and Natwest customers will find they now have days, rather than weeks, to pay credit card bills and avoid interest payments.

Up until New Year’s Eve RBS and Natwest cardholders will have 25 days from the date a credit card statement to the due payment date – this will be cut to 15 days.

Credit card bills often take up to five days to arrive by post. Considering payments have to be made in time for the funds to clear by the due date, this could give someone paying by cheque only three days to settle the bill. Those who fail to pay on time will be liable for a £12 penalty charge.

Although RBS has advised all cardholders of the new terms and conditions, the details of this change are buried in the small print. According to Mike Naylor of uSwitch, the price comparison website, the action by RBS is part of a wider move by credit card companies to increase revenue by introducing “stealth” charges.