Credit Card companies are raking in hundreds of millions of pounds in credit card penalty fees and interest charges because lenders are failing to stop transactions would would exceed a cardholder’s credit limit.

A report by declares that this is against a two-year crackdown on unfair practice by the Office of Fair Trading. Campaigners say that a ‘credit limit’ should be as it implies, and that a credit card should be declined at point of sale rather than a consumer having to pay fees on excess borrowing.

Those who are taking advantages of 0% interest rate deals suffer the worse as, when the credit limit is passed, the consumer will lose the special interest rate and can face additional charges. Steve Willey, head of credit cards at comparison website said: “It is wrong to set a borrowing cap and then allow transactions to take cardholders over this limit and charge them penalties.”