Credit card fees becoming more expensive

HSBC raises fees to over 2.5 percentage points and more leading banks are following suit.

HSBC said that effective July, interest rates on outstanding credit card balances and cash advances will be an annualized at 34.46% and 35.6%, respectively, an over 2.5 percentage points increase.

This move follows that of Hang Seng Bank that raised its rates and fees this month. Bank of China (Hong Kong) and China Construction Bank Asia will follow suit in May. DBS, however, said it has no plans to raise interest rates and fees.

This series of increases comes a month after the implementation of the third and final stage of credit card reforms aimed at improving bank disclosure and other practices.

This final stage of reforms covers interest rate hikes, over- the-limit transactions, fees and charges and disclosures of terms and conditions. It also addresses late payment penalties and handling charges when a check for a repayment bounces.

New rules prohibit banks from imposing multiple charges on a cardholder.

The reforms are being undertaken by the Hong Kong Monetary Authority and the Hong Kong Association of Banks.