Who told you that the credit card issuer loves you so much as to give you an easier way of making payments without anything in it for them? You may not know it but the credit card issuer is in business and you the customer must pay for the convenience of using such a facility on top of paying up your bills as well as any accruing interest. Call it handling fees if you will but there are a host of silent charges and fees that you pay each time you use the facility. This must come as a surprise to many a credit card user.
There are many similar charges that customers have to part for using the conveniences of modern life and the reason many don’t complain may be the small amounts involved or sheer ignorance. Call it being taken advantage of or what you will but the truth is that such fees exist. The charges may not make headlines for reason that they are relatively small but interesting enough, data available from Reserve bank indicates that there has been a 170% increase in credit card fees during the last five years.
You may think that credit card issuers are always thinking of new ways to get revenue from either users or outlets. What you need to know is that there is always a BPAY fee that applies every time a credit card is used. BPAY therefore demands a fee from Visa/Amex/MasterCard etc for supplying their services. The reason some card issuer charge you a fee to use the service wile others don’t is that more often than not the merchant will pass on this additional cost to you the cardholder. There are a few other card issuers who take up the fee and that is why it is not reflected anywhere on your statement.
You can imagine that with an interest rate that is close to 30% per annum on all outstanding balances that card issuers would be lenient enough to take up the charges by BPAY but that is not always the case. But then if that shocks you also need to know about another spiteful fee connected with the use of your credit card. There are some merchants treat your bill through BPAY not as a purchase but as an advance given to you. What this means then is that you are charged interest from day one.
People on an introductory offer thinking there are interest free days not knowing that cash advances may not have such a privilege. There are also those cards that have a higher interest rate than the normal purchase rate and this makes a huge difference in what you will end up paying. What happens here is simply that the merchant will just not touch the BPAY fees that your credit card issuer is charged. The issuer therefore gives cash to BPAY and your credit card debt is treated as a cash advance. This is the same fate that befalls even those people who use their credit cards to pay rent to their landlords.
