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Warning for Lloyds credit card users

Fri, 23 Feb 2007

Concerns have been raised over a £35 low usage fee that is to be introduced by Lloyds TSB, targeting credit card users who do not use their card frequently.

Experts at uSwitch maintain that while the fee, designed to encourage credit card owners to close their accounts are make greater use of their credit card, "doesn't seem totally unreasonable", fears are mounting that credit card holders could see more of the same in the future.

uSwitch estimates that the charge could generate almost £1.8 million for Lloyds during the course of next month, specifically targeting low usage credit card customers. Nick White, director of financial services at uSwitch maintains that Lloyds' move could signal industry-wide changes.

"The fact that this charge is being implemented without being open and transparent about what customers it will affect indicates that they might just be picking out customers that do not make enough money for them," he said.

"This will certainly open the floodgates for other credit card providers that are still desperately trying to claw back the lost revenue following the OFT's [Office of Fair Trading] reduction of penalty charges last year."

The Financial Ombudsman Service is reportedly receiving nearly 10,000 complaints every day over bank charges, reflecting growing consumer unrest over fees imposed by banks.


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