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"Annual fees could be introduced by more credit card firms"

By admin | August 3rd, 2009 | Credit Cards

There are concerns that a rising number of credit card firms could start introducing annual or monthly fees for their credit card customers in order to make up for lost revenue resulting from government and regulatory crackdowns.

One major credit card provider, Egg, has already launched a new card with a £1 a month fee, which amounts to a £12 annual fee, and it is claimed that a rising number of credit card providers could follow suit.

Industry officials feel that Egg has started the ball rolling and that other credit card firms will quickly start doing the same. One industry expert 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 stated: “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 also went on to state: “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: annual fees, credit card fees, credit card charges

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