Annual Credit Card Fees Back on the Agenda
With UK banks being squeezed over unfair charging, I guess it was only a matter of time before we would end up paying elsewhere to plug the gap.
According to Easier Finance:
“Following the OFTs cap on fees, card providers will need to reintroduce annual card fees of up to £35 or raise interest rates by up to 2% to recoup losses estimated at £1bn, claims a report issued by PricewaterhouseCoopers (PwC).”
Michelle Slade, analyst at moneyfacts.co.uk comments: “Credit card providers have not been slow to react. In the three months following the OFT intervention, Moneyfacts researchers found 19 card providers increase interest rates by an average of 2.5%. With some unlucky customers facing rises of 5%, 6% and even as much as 12%, so it looks as if the £1bn reclaim is already well under way.”
“The trend of introducing card fees has also begun. Recently Lloyds TBS launched a new card, Premier Amex with a £4.95 per month fee available for Premier Current Account customers, offering a comprehensive range of benefits. But more interestingly, last week Co-operative Bank announced that for new and existing customers, their Platinum Tracker and Northern Rock Base Rate Visa would both carry a £2 per month fee. So while the Co-operative received special attention, in cutting its default fees to below the OFTs recommended £12 threshold, with default fees lowered to £11, this recent introduction of a monthly fee will prove unwelcome news for their customers.”
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