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Card penalties 'hit one in four' | |
(about 2 hours later) | |
One in four credit card customers has had to pay a penalty fee in the past year, a survey suggests. | One in four credit card customers has had to pay a penalty fee in the past year, a survey suggests. |
Customers pay out an estimated £230m a year in penalty fees, says financial website Moneysupermarket.com, which conducted the survey of 2,116 people. | |
Penalty fees are imposed by card firms when customers miss a repayment. | Penalty fees are imposed by card firms when customers miss a repayment. |
Last year, the Office of Fair Trading (OFT) said card penalty fees were "disproportionately high" and imposed a £12 fee cap on card providers. | Last year, the Office of Fair Trading (OFT) said card penalty fees were "disproportionately high" and imposed a £12 fee cap on card providers. |
Since the price cap was imposed all providers have lowered their penalty fees. | Since the price cap was imposed all providers have lowered their penalty fees. |
However, the fees are still providing a source of income for card issuers. | However, the fees are still providing a source of income for card issuers. |
"Penalty fees still affect a significant proportion of the population and providers are raking in some hefty cash, even after the Office of Fair Trading-imposed £12 cap," said Rob Kenley, head of credit cards at Moneysupermarket.com. | "Penalty fees still affect a significant proportion of the population and providers are raking in some hefty cash, even after the Office of Fair Trading-imposed £12 cap," said Rob Kenley, head of credit cards at Moneysupermarket.com. |
But Mr Kenley added that consumers would not be happy if providers replaced penalty fees with standard monthly or annual card fees. | But Mr Kenley added that consumers would not be happy if providers replaced penalty fees with standard monthly or annual card fees. |
Just one in eight credit cardholders said they would like to see penalty fees replaced with a set monthly or annual charge. | Just one in eight credit cardholders said they would like to see penalty fees replaced with a set monthly or annual charge. |
"If providers were thinking about introducing them (monthly or annual charges), they would have to offer cardholders much more than simply replacing penalty fees," Mr Kenley said. | "If providers were thinking about introducing them (monthly or annual charges), they would have to offer cardholders much more than simply replacing penalty fees," Mr Kenley said. |
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