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Credit card charges will not deter customers, expert claims

Thu, 16 Nov 2006

Customers will not be tempted to scrap their credit cards if providers add extra charges to the plastic, an expert has claimed.

Credit card users are unlikely to switch to debit cards as they are a "very different form of managing finances", even if banks introduce additional fees, stated Nick White, director of financial services at uSwitch.

The expert commented in the wake of PricewaterhouseCoopers' report, which claimed that many credit card providers would introduce additional fees to recoup the £1 billion lost following the Office of Fair Trading's ruling that charges were excessive.

"It would be wrong to predict that an annual fee would make people move away from credit cards to debit cards," remarked Mr White.

"With some people already predicting the end of free banking, free debit card transactions could also become a distant memory."

Moneyfacts recently predicted that credit card providers will look to place additional fees on card usage as rising levels of bad debt, 0% credit cards and new regulations on charges have left their books unbalanced.


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