Free banking could be a thing of the past as credit card providers look for other ways to make money, according to an analyst at financial website moneyfacts.co.uk.
Following the limits set by the Office of Fair Trading (OFT) on fees for late payments or exceeding credit amounts, it has been suggested that lenders could reintroduce an annual fee for using a credit card.
And Michelle Slade of moneyfacts.co.uk has stated that since the new regulations, many lenders have increased their rates of interest in an attempt to reclaim the money previously raised by late fees or charges.
In April, the OFT said that any default charge over £12 would be considered “unfair”. Consequently, Ms Slade maintains, there is now “a legacy” of interest rate rises with the added possibility of annual charges.
“The cumulative impact of the cost of offering zero per cent credit card deals, rising levels of bad debt and the penalty fee capping imposed by the OFT have left the card companies with no option but to look at how they can balance their books,” she remarked.
It was further announced in September that the OFT plans to look into default charges relating to the use of current accounts.
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