Card firms 'interested' in imposing charges

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Card firms 'interested' in imposing charges

Credit card customers could now face rising interest rates should they consistently fail to make their payments on time, new research from Defaqto suggests.

Allied to this, annual fees are a likelihood says Defaqto in the wake of the Office of Fair Trading's (OFTs) ruling that money lenders cap their charges at £12.

Due to profits being affected by the OFT regulations, card providers are thought to be looking to impose charges in other areas in a bid to account for the deficits they will suffer.

Author of the Defaqto report, Credit Cards in the UK - Protecting Margins, David Black, Defaqto's head of banking, said: "Annual fees will more likely be introduced for people who pay off their balance every month rather than for those who carry debts. Those who have debts on their cards are more easily targeted by an increase in interest rates."

Defaqto's report discovered that Cooperative Bank has already put in place a charge of £2 per month for its Platinum Base Rate Tracker card and expects more to follow suit.

A PricewaterhouseCoopers report published recently suggested that credit card firms could turn to an annual credit card fee to make up for losses in excess of £1 billion.

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