News & Views - Savantor

Credt card fees

Thursday, 30 September 2010

A report by the Bank of England confirmed that £3.5 billion was written off by UK banks and building societies between April and June 2010 with £2.1 billion of this write-off directly associated with credit card debt up from £1.3 billion in previous quarter.  According to a BBC report, the 2010 total for bad credit card debt now looks set to exceed the record £4.1 billion written off by lenders last year.  Meanwhile Credit card lending marginally increased, in August although it was below the average of the previous six months.

No surprise then to read stories again predicting the end of free credit cards as issuers have to do something to offset the hits on income streams such as higher interest rates annual charges or less attractive offers.  The more prestigious cards already bear annual fees supposedly offset by benefits provided.  However amongst the mainstream offers only Capital One and Egg charge annual fees which can be cancelled out by cashback if spending is high enough.  Now Sainsbury’s Gold Card is introducing a £5 monthly fee aimed at families who travel abroad.  Not so appealing for those without children who don’t travel much but could it be the beginning of the end for free cards?

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