Barclaycard Considering Extra Charges For Low Usage Credit Card Customers
In a move which has sparked outrage among consumer groups, Barclaycard are considering the introduction of a £20 annual charge for customers who “do not use their cards enoughâ€. The UK is currently in the grip of a personal debt nightmare, with IVAs and bankruptcies on the up, and this move (sure to be followed by competitors) will worsen the situation.
The company are soon to mailshot 1 million of their customers who do not use there cards very often, in a last ditch attempt to encourage increased usage. While Barclaycard have said the £20 annual charge will be used as a “last resortâ€, the ball has started rolling and it is only a matter of time before the charge becomes a reality.
Barclays have approximately 15% of the UK market (by far the market leader) which translates to some 9.8 million customers. The potential for substantially increasing their income is significant, and is seen by many as a further backlash from recent Office Of Fair Trading (OFT) investigations into the industry. Quite where this bickering between the financial industry and the OFT will end is anyone’s guess, but as ever the consumer is the main loser.
The Credit Card industry in the UK is in danger of alienating the low spending customer, who may only spend at Christmas time or for holidays. Barclaycard have refused to release details of the internal spending limits which they have calculated but we should see the emergence of further scare tactics in due course.
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