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31 May 2007
Barclaycard has become the latest in a long line of credit card issuers that have decided to charge customers that do not use their credit card accounts regularly enough.
Industry experts and professionals feel that a number of credit card companies are finding ways to try and increase revenue as a result of financial losses from penalty fees.
Last year regulators in the UK placed a cap of twelve pounds on the amount that credit card companies could charge by way of fees. Prior to this many card issuers had been charging two or three times this amount.
The move by UK regulators resulted in huge financial losses for credit card companies, and since this time many card issuers have been looking for other ways of making up for this lost revenue.
This includes increasing interest rates, increasing cash transaction charges, widening the type of transactions that can be construed as cash transactions, imposing annual fees, and charging customers that fail to use their credit cards regularly.
It is thought that around one million Barclaycard customers could be affected by the new charge, which in effect means additional profits of twenty million for Barclaycard.
Those that have not used their credit card in a one year period are likely to be charged the twenty pounds fee, as are those that do not meet specified minimum spending or usage limits with their cards.
A spokesperson from Barclaycard stated: "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. As a last resort, we are considering a fee for a minority of customers that simply do not use their card. Details aren't yet final but we expect the amount to be between £10 and £20 - less than £2 per month."
Although many consumers have expressed anger at credit card companies that are forcing customers to use their cards else face charges, card issuers have their own argument with regards to the situation.
Many credit card companies that have started imposing this sort of fee state that they are otherwise experiencing financial losses as a result of customers that have accounts that need to be administrated - for instance, having to send statements out – but do not use the card hence end up costing the card issuer money.
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