A thicket of credit-card fees

It is easy to get a credit card in Hong Kong. Banks make a lot of money from this business and, to attract new customers, they offer promotions such as cash coupons and free subscriptions on pay-television channels.

People who sign up thus enter a world of potentially steep fees and interest expenses.

To help people make informed decision about credit-card use, we've compiled a table of the most basic fees for entry-level cards issued by eight of Hong Kong's major banks. The essential finding: it can get expensive to use your plastic if you do not pay attention.

All banks apply a late-payment charge, which is calculated using various formulas (see table). The main point is that, regardless of how little you owe, a late-payment charge will kick in ranging from a minimum of HK$130 for Industrial and Commercial Bank of China and HK$180 for all other banks.

Banks also charge a cash-advance handling fee when a customer uses a credit card to get money from an ATM. The banks surveyed charge between 3 per cent and 4 per cent of money withdrawn. A few also charge administrative fees, such as Bank of China and DBS.

Given these costs, it makes little sense to get a cash advance with a credit card if one's ATM card is handy (for which no fee is charged).

Transferring money deposited with your credit card account to your savings account can also be costly. This can happen if, for example, you return a purchase and the vendor reimburses to your credit card account.