GE Money hikes credit card fees by 30%: Inside Retail

The monthly account service fee of GE Money's credit cards have been increased by almost a third, it has emerged.

Inside Retailing claimed GE Money - a supplier of credit to a number of Australia's biggest retail chains - has sent a letter to its card holders informing them of the decision.

Allegedly the letter informed holders that the monthly account keeping fee would rise from $2.95 to $3.95.

According to Inside Retailing, the fee is in lieu of interest so both the retailer and credit card company can offer interest-free promotions and the hike could generate an extra $3.6 million in revenue for GE Money.

GE Money chief executive Mike Cutter has also warned this week that it could take up to 36 months before the global credit crisis is over, according to the Australian.

He advised that people in Australia are going to have to understand what a "protracted period of time with higher debt costs means to them".

"Some companies will have to restructure their financing, others will find it tough to shoulder that burden and there will be some collapses," he told the newspaper.

Mr Cutter added that he believed the banks will move to "pass rate reductions on" but does not think that that they will pass down the whole of the reduction every time the RBA reduces the deadline cash rate.

"They are going to have to consider their actual cost of funding, as opposed to the headline cash rate," he said.

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