Lloyds charging for staying out of debt

With credit card related consumer debt at sky high levels, and many people struggling to repay the balances on their cards thus ending up with mountains of debt, it seems that credit card holders just cannot win at the moment.

Those who do use their cards and spread the repayments over a set time period find themselves being hit with extortionate interest rate charges, which can often result in the credit card debt spiralling out of control. However, it now seems that even those that keep a tight reign on credit card spending and rarely use their card or repay the balance in full could also be penalized.

In the light of many banks complaining over the high level of bad debts that have arisen over recent years due to consumers failing to pay off their credit card balances, Lloyds TSB has dealt a surprising blow to loyal credit card customers that do manage to keep a reign on their credit card spending and do repay their balance in full.

The bank has announced that credit card consumers that rarely use their cards and pay off their balances in full each month could be hit with an annual fee of thirty five pounds. It is thought that around fifty thousand of the bank’s customers will be affected.

After being forced to slash the amount charged to consumers that miss payments or make late repayments, the credit card industry and banks seem to have been looking for various ways in which to recoup financial losses.

According to reports credit card users that do not use their cards very often or that repay their balances in full do not generate any significant income for the credit card yet still cost the banks and credit card companies money in terms of administering their accounts, sending out statement, etc.

Tom Smith
15th March 2007