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OFT set to rule on late payment fee's
file_wizzard
Posts: 879 Forumite
in Credit cards
Courtesy of "checkmyfile.com"
Lenders to be forced to slash late payment fees
The Office of Fair Trading is set to force lenders to slash the penalties they currently charge card holders for paying late by as much as 40%.
Lenders make up to £2 billion a year from late payment penalties, and it is estimated that the reduction in charges could cost them up to £1.5 billion annually.
The OFT is proposing to cap the fee that lenders can charge customers for late payment at £15, although there are calls from consumer watchdogs to reduce this even further, to as little as £5. As shown in the table below, the major UK card issuers currently charge between £20 and £25 every time a customer pays late.
Company Number of
Card Holders Late
Payment Fee
Barclaycard 9 million £20
Halifax 7 million £25
MBNA 6 million £25
Lloyds TSB 5 million £20
HSBC 4 million £20
Nationwide 900,000 £20
American Express 800,000 £25
We see late payments on most credit files that we analyse – it’s human nature to forget occasionally. By forgetting the odd payment deadline, or by not checking statements carefully enough, it’s possible that you will not only have to cough up the late payment fee, but also damage your credit rating.
Lenders to be forced to slash late payment fees
The Office of Fair Trading is set to force lenders to slash the penalties they currently charge card holders for paying late by as much as 40%.
Lenders make up to £2 billion a year from late payment penalties, and it is estimated that the reduction in charges could cost them up to £1.5 billion annually.
The OFT is proposing to cap the fee that lenders can charge customers for late payment at £15, although there are calls from consumer watchdogs to reduce this even further, to as little as £5. As shown in the table below, the major UK card issuers currently charge between £20 and £25 every time a customer pays late.
Company Number of
Card Holders Late
Payment Fee
Barclaycard 9 million £20
Halifax 7 million £25
MBNA 6 million £25
Lloyds TSB 5 million £20
HSBC 4 million £20
Nationwide 900,000 £20
American Express 800,000 £25
We see late payments on most credit files that we analyse – it’s human nature to forget occasionally. By forgetting the odd payment deadline, or by not checking statements carefully enough, it’s possible that you will not only have to cough up the late payment fee, but also damage your credit rating.
:rolleyes: It’s hard enough remembering my opinions - without remembering my reasons for them :rolleyes:
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