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Posted - 24 May 2007 : 09:51:30
Barclaycard may charge low users
Barclaycard is considering introducing a fee for customers who do not use their cards enough.
If introduced, the fee could be imposed on "low usage" customers, people who use their cards infrequently or not at all and could be as high as £20 a year.
The group is set to contact up to one million customers in order to try to persuade them to use their cards more and thereby avoid the fee.
Other card firms would probably follow Barclaycard's example, analysts said.
Barclaycard said that fees would only be introduced as a "last resort".
"We will do everything we can to improve the deal we give people, encourage them to use our card, not someone else's and avoid fees," a Barclaycard spokesman said.
"As a last resort, we are considering a fee for a minority of customers that simply do not use their card," he added.
Barclaycard would not say what customer behaviour would prompt them to define them as "low usage".
Watershed
Any introduction of a "low usage" fee by Barclaycard would be a watershed for the industry.
Barclaycard is by far the UK's biggest card provider, with 9.8 million cardholders and about 15% of the total credit card market.
The move is part of a growing trend of credit card providers imposing annual fees and charging for switching debt from another card.
"Given Barclaycard holds a market share of around 15%, it is likely we will see this trend spread across the entire industry," Nick White, director of financial services at uSwitch said.
"This is probably a good time for consumers to ensure they close down any accounts they no longer use," he added.
However, Barclaycard would not be the first to introduce such a fee.
In February, Lloyds TSB started to levy a £35 charge on 50,000 "low usage" card accounts.
At the time, like Barclaycard now, Lloyds TSB would not give a definition of what "low usage" actually meant.
Source: bbc.co.uk
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