Apacs: credit card market competition

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Apacs: credit card market competition

Thu 22nd Feb 2007

Lloyds TSB's decision to charge customers who do not use their credit cards £35 per month suggests the credit card market is "in a state of change", Sandra Quinn, chief executive of UK payments association Apacs, has said.

The bank's move is designed to encourage customers to choose to use their Lloyds credit card over competitors' cards, Ms Quinn told Channel 4's News at Noon programme, noting that the average Briton has two such cards.

"The battle for credit card companies is … to be the card that you pick up first when you open your handbag or your wallet," she commented.

The charge could be designed to make up the credit card company's income shortfall after charges on customers who defaulted on payment were reigned in by an Office of Fair Trading ruling last year.

The bank insists the charges will affect only one per cent of customers.

But critics of the introduction of the charge may point to the fact that Lloyds TSB is expected to report annual profits of £3.7 billion this week.

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