Credit card customers who persistently pay late or exceed their limit could face increases in their rate charges financial services company Defaqto has warned.
The group also believes annual credit card fees are likely to be imposed as the industry reacts to a regulatory crackdown according to Defaqto’s report.
The potential tough tactics could come as a response to the Office of Fair Trading forcing companies to cut so-called “delinquent charges” to a capped £12, which is obliging credit card providers to look at alternative techniques to protect their margins, including higher interest rates for certain customers.
Credit firms are also facing further potential regulatory action over costly payment protection insurance with Defaqto estimating the average cost to consumers looking to receive £100 of monthly credit varying from £5 to £28.33.
Defaqto’s “Credit cards in the UK -Protecting Margins” report reveals that Co -Operative Bank has already introduced a £2 monthly charge on its platinum base rate tracker card.
Defaqto head of banking and report author David Black says: “Annual fees will more likely be introduced for people who pay off their balance every month rather than those who carry debts. Those who have debts on their cards are more easily targeted by an increase in interest rates.”