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| Annual credit card fees 'return' | Annual credit card fees 'return' |
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| Annual fees for having a credit card could be on the way back, a study by PricewaterhouseCoopers (PWC) says. | |
| The fees, which fell out of fashion in the late 1990s, could make a comeback as card providers try to recoup losses from new consumer protection measures. | The fees, which fell out of fashion in the late 1990s, could make a comeback as card providers try to recoup losses from new consumer protection measures. |
| The Office of Fair Trading's (OFT) cap on credit card default charges and its payment-protection insurance probe has hit card providers' incomes. | The Office of Fair Trading's (OFT) cap on credit card default charges and its payment-protection insurance probe has hit card providers' incomes. |
| Fees of £35 would have to be levied to make up their losses, PWC said. | Fees of £35 would have to be levied to make up their losses, PWC said. |
| In total, PWC estimated that card providers would lose £1bn of revenue because of the OFT's actions. | In total, PWC estimated that card providers would lose £1bn of revenue because of the OFT's actions. |
| "With fierce competition and rising bad debts already hitting issuers, it is hard to see how the banks will absorb £1bn of lost revenues," said Richard Thompson, a partner at PWC. | "With fierce competition and rising bad debts already hitting issuers, it is hard to see how the banks will absorb £1bn of lost revenues," said Richard Thompson, a partner at PWC. |
| If we find any evidence of collusion (over the re-introduction of annual fees) that will be very serious indeed, OFT spokesman | If we find any evidence of collusion (over the re-introduction of annual fees) that will be very serious indeed, OFT spokesman |
| "We are likely to see a 'waterbed effect', whereby charges pushed down in one area pop up somewhere else." | "We are likely to see a 'waterbed effect', whereby charges pushed down in one area pop up somewhere else." |
| Nineteen card issuers had already raised their interest rates in the three months to September, the study found. | Nineteen card issuers had already raised their interest rates in the three months to September, the study found. |
| The re-introduction of annual charges could be the next step, PWC said. | The re-introduction of annual charges could be the next step, PWC said. |
| Collusion warning | Collusion warning |
| According to financial product comparison site Moneyfacts, card providers are already gearing up to impose fees. | According to financial product comparison site Moneyfacts, card providers are already gearing up to impose fees. |
| "Every provider is trying to find a way of getting their money back," Michelle Slate, Moneyfacts senior researcher, said. | "Every provider is trying to find a way of getting their money back," Michelle Slate, Moneyfacts senior researcher, said. |
| "Last week Co-op imposed an annual charge and some premium credit cards - with added benefits such as travel insurance - already charge hefty fees. | "Last week Co-op imposed an annual charge and some premium credit cards - with added benefits such as travel insurance - already charge hefty fees. |
| "All it will take is for one of the big providers - Barclaycard, MBNA or Capital One - to introduce a fee and the rest will follow." | "All it will take is for one of the big providers - Barclaycard, MBNA or Capital One - to introduce a fee and the rest will follow." |
| The OFT warned providers not to collude over any possible re-introduction of annual fees. | The OFT warned providers not to collude over any possible re-introduction of annual fees. |
| "It is OK if providers look independently at what other firms are charging and adjust their prices accordingly but if we find any evidence of collusion that will be very serious indeed," an OFT spokesman said. | "It is OK if providers look independently at what other firms are charging and adjust their prices accordingly but if we find any evidence of collusion that will be very serious indeed," an OFT spokesman said. |
| We seem to be coming full circle with annual fees potentially becoming the norm again Michelle Slate, Moneyfacts How card companies are increasing their charges | We seem to be coming full circle with annual fees potentially becoming the norm again Michelle Slate, Moneyfacts How card companies are increasing their charges |
| He added that the OFT's decision, made in May, to cap credit card default charges was in the best interest of consumers. | He added that the OFT's decision, made in May, to cap credit card default charges was in the best interest of consumers. |
| "The scale of these fees was unfair, they did not truly represent the costs to the business of recovering the debt." | "The scale of these fees was unfair, they did not truly represent the costs to the business of recovering the debt." |
| He added: "I think if we see these fees re-introduced consumers will vote with their feet." | He added: "I think if we see these fees re-introduced consumers will vote with their feet." |
| But according to Ms Slate, Britain's recent debt binge may mean that many consumers have no option but to accept the re-introduction of fees. | But according to Ms Slate, Britain's recent debt binge may mean that many consumers have no option but to accept the re-introduction of fees. |
| "If you have a large amount of debt on your card, it could be quite expensive to move it as many cards have started charging balance transfer fees. They will have to swallow any fees that are coming to them. | "If you have a large amount of debt on your card, it could be quite expensive to move it as many cards have started charging balance transfer fees. They will have to swallow any fees that are coming to them. |
| "We seem to be coming full circle with annual fees potentially becoming the norm again," she added. | "We seem to be coming full circle with annual fees potentially becoming the norm again," she added. |