Published: 01/07/2009

Whilst we understand that banks, credit card providers and building societies are just like any other business looking to make a profit, you need to be on your guard to make sure they're not taking you for a ride.

There have been a couple of press announcements from banks this week that on the face of it appear to be helping the customer, however when you scratch beneath the surface, it soon becomes clear that it's just another way of parting people from their hard earned cash.

The first of these examples came from credit card giant, Barclaycard, who were offering to reduce the minimum monthly repayment for some of their customers. Instead of having to pay at least 2.25% of the statement balance, they were offering the chance to pay an even smaller amount of just 1.5% each month.

So if you have a £3,000 debit balance your monthly repayment would drop from £67.50 to £45 per month - giving you an extra £22.50 spare in your monthly budget.

Sounds great, but the reality is very scary, because what it really means is that it'll take longer to repay and cost you a lot more interest, and much more than you would ever imagine.

If your £3,000 credit card debt was being charged at 16% APR and you paid the £67.50 per month (2.25%) it would take 28 years to repay and cost you £3,942 in the process. However, just by cutting your minimum repayment to £45 (1.5%), would mean that your debt would take a staggering 111 years to clear and cost £19,329 in interest charges - ouch!

So you can see why the card providers like to make it look as if they are doing you a favour because the reality is that they will be making hugely inflated profits at your expense.

If you've got a credit card balance, the trick is to ensure you repay as much as you can afford each month, not just the minimum balance.

A good way for you to turn the tables on the credit card companies is to switch your balance to a new card that offers 0% interest - the Virgin Card for example offers 16 months interest free, but there are plenty of other deals of 12 months or more available, click here to find what's available today.

The other story we saw this week was that Lloyds TSB were offering customers the opportunity to text them 'on demand' to find out their balance or details of recent transactions.

Again this sounds like a decent idea and something that people may find useful. However if you are a wealthy premier or private customer this service is free of charge, but for the rest of the Lloyds TSB customers there is a £2.50 monthly fee for the 'on demand' text package.

If you sign up to internet banking you can check your balances and manage your account for free, so don't sign up for a service that's going to cost you £30 per year unless it really makes sense for you.

At the end of the day it's just another revenue earner for the bank and in time you'll forget that you're shelling out £2.50 per month - a bit like that standing order for the dental plan and the gym membership that you don't use either.

So whilst your bank may look as if it's trying to be friendly and helpful, please keep on your guard as their number one priority is to relieve you of your hard earned money as they boost their big fat profits.