£20 fee imposed by Barclaycard

Barclaycard has become the latest credit card company that plans to impose a fee on accounts that are not regularly used.

The largest credit card company in the UK, Barclaycard plans to introduce a fee of £20 for customers that do not use their accounts enough. Customers that have not met a set target for credit spending or have not used their card in the past year are likely to be hit with the £20 fee.

According to some officials around one million customers could be hit with this fee, and this means that Barclaycard will net a healthy £20M in additional profits from this fee alone.

A number of credit card companies have already introduced this type of fee in a bid to try and make up for lost revenue following the ceiling limit that was placed on fee charges last year by financial regulatory bodies in the UK.

Amongst the other credit card issuers that have imposed this type of fee are Lloyds TSB, which charges £35 on accounts that are not used enough, and MBNA, which imposes a £10 fee for accounts with positive balances.

Several credit card companies have stated that without such fees it is not worth having customers that do not use their accounts on their books, as it means that the card issuer has to deal with the cost of servicing the account but does not make any profit from it.

A Barclaycard spokesperson stated: 'We will do everything we can to improve the deal we give people, encourage them to use our card, not someone else's and avoid fees. As a last resort, we are considering a fee for a minority of customers that simply do not use their card. Details aren't yet final but we expect the amount to be between £10 and £20 – less than £2 per month.'

Tom Smith
1st June 2007

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