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"More credit card customers may have to pay annual fees"

By admin | July 30th, 2009 | Credit Cards

Industry officials have stated recently that an increasing number of credit card holders in the UK may be forced to pay annual fees on their credit cards, as credit card providers try to make up for losses caused by credit card crackdowns by recouping money through other means, such as applying annual fees and charges.

Internet lending giant, Egg, has already announced recently that its new credit card will come with a £1 per month fee, and many other credit card companies are expected to take a similar stance.

One industry expert stated that the decision by Egg was likely to be the first of many. He said: “Egg is the first major credit card provider to introduce fees on mainstream products, and this is only the tip of the iceberg. We are likely to see more providers follow suit as they try to claw back profitability following the launch of the Consumer Protection White Paper last week.”

Another industry official said that the introduction of annual fees on an increasing number of credit cards would simply result in ’salt being rubbed in the wound’.

He said: “The introduction of a monthly credit card fee by Egg could potentially start an unwelcome trend. One pound per month may not sound much in isolation, but to the credit card industry it represents a massive opportunity to boost profitability. The majority of customers in the UK have never paid a fee for their plastic and will be dismayed if the move by Egg is followed by other credit card providers.”

He added: “Ever since credit card penalty fees were capped at £12 back in 2006 we have seen a hike in cash withdrawal fees, foreign usage fees and balance transfer fees – monthly fees on top of this will just be rubbing salt into the wound.”

Tags: credit card annual fees, egg credit card, annual fees, Credit Cards

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