Credit card providers could soon charge annual fees to account for recent changes enforced by the Office of Fair Trading, an expert has predicted.
Earlier this year, the Office of Fair Trading deemed that charges imposed by credit card providers were too high, which led to the companies cutting the penalties.
However, credit card providers may start charging an annual fee to recoup an estimated £1 billion loss in the wake of this ruling, Moneyfacts has claimed.
The company cited newly released PricewaterhouseCoopers' research, which found that a £35 annual credit card fee or two per cent rate change would be needed to offset this margin.
Michelle Slade, analyst at Moneyfacts, comments: "The cumulative impact of the cost of offering 0% credit card deals, rising levels of bad debt and the penalty fee capping imposed by the OFT [Office of Fair Trading] have left the card companies with no option but to look at how they can balance their books."
However, AWD Chase de Vere recently stated that credit card providers have "shot themselves in the foot", with many Britons looking to pay off their debt, rather than add to it.
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Expert expects credit card fees
Tue, 14 Nov 2006
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