Credit card Annual fees return - your views?

roswell

As it says in the title, Annual crit card fees may return,

your views ?

http://news.bbc.co.uk/1/hi/business/6135864.stm

Phoenix79_2

If fees come back it would persuade me to close any cards that i don't regulary use. As for paying a fee......if i'm saving hundreds a year on interest on 0% BT cards then i guess its something i would grudgingly pay....

Beancounter

I would simply close all my accounts and start using my debit card instead. End of story.

Phoenix79_2

Isn't that biting off your nose to spite you face? Seriously....it would be a pain to pay a fee but if you use your cards correctly then you could still come out on top. 0% on purchase cards, cashback cards, 0% balance transfers etc....they would still be worth it even with a yearly fee on the card. The rewards would just be less.

greencat_2

I'd close all my credit cards. I don't spend much on them anyhow. I closed Egg the other week anyway - just to give them the double whammy of a loss in marketshare to go with their dip in profits (childish I know).

Seriously though did anyone think that banks were going to take having to pay all of those overdue charges back lying down? This is their way of getting it back - and the people who lose out will be those who can't afford to dump their CC or transfer the balance somewhere else.

Tim_L

There's no cause and effect between people reclaiming unlawful charges and the suggestion return of fees (which is probably just a kite flying exercise anyway). Banks want to charge fees for cards and current accounts, have done for years, and charge reclamation provides a convenient set of scapegoats. There is no karma division in the strategic development department of banks saying, "well, if they don't reclaim unlawful charges we'll balance it out by not charging fees": banks will try to get away with anything they can, and as consumers it's our job to stop them rather than bleating about the fact that other consumers have managed to get their own money back that should never have been taken in the first place.

And to be brutally honest, stoozing is as much if not more of a problem to credit card companies than charge reclamation. This cost the card companies a lot of money, which they were hoping to get back in interest later or by having a bigger market share, but instead they have thousands of dormant accounts.

I'd be amazed if it happened, frankly. If card companies are willing to pay through the nose to build market share they will hardly throw it away by charging. This doesn't preclude some sort of limited use fee which I think are around anyway, and which is fair enough really.

And as to the point about those who have big balances on CC and can't afford to transfer, well since CC's are about the worst way imaginable to borrow money long term, it's difficult to see why they should be bothered by a tenner a year extra. Interest rate hikes will have a far greater effect. There are plenty of ways of removing debt from cards, including personal loans at rates which are likely to be of the order of a quarter of a credit card amount.

lisyloo

I would do the sensible thing, which is be objective and work out what each card is worth to me.
I have one cashback card and one Nationwide card for use abroad.
I almost certainly save more than the annual fee on each so I would probably keep them and pay the fee (although it would depend on the cost).

I would certainly get rid of any unused ones, but I don't currently have any of those anyway because I believe they are a fraud risk and clutter up my credit report.

nearlyrich

My Egg card returns £200 a year cashback so I would reluctantly pay a fee, however I am sure some CC comapnies would have fee free cards. There are
e lots of CCs now with fees which some people are willing to pay and it doesn't seem that long since CCs and Current accounts all attracted fees which no longer apply.

Sammz

I'd get rid of mine too. I don't need it.

Graham1

I would think it would be worth keeping one card in order to be able to make purchases that are covered by the consumer credit act. All the rest could go.

ReportInvestor

Keeping one card makes sense.

I'd already decided to switch to a debit card for other reasons, as explained here

An annual charge (to reduce an excessive interest rate) could be seen as a more socially just arrangement, since the current situation means that the poor & incompetent subsidise the better off (or the better financially organised which comes to mean the same thing over a few decades).

I don't know what the effect on the consumer economy would be. Possibly substantial?

And it might help bring back budgeting (as I tentatively suggest on my earlier link).

And it might reduce fraud if we all just had one credit card that we were tracking more carefully.