Credit card annual fees making a comeback

By UK CreditCards.com

Annual fees make a comebackDeclining revenues are spurring on credit card firms to roll out annual fees for their products, a new report has suggested.

The study by Auriemma Consulting Group noted that the trend of customers keeping less money on their cards is resulting in a loss of income for card firms.

Figures from the consultants show that card companies have written off around 10% of accounts since the end of last year, up from the 3% to 5% recorded in 2006.

This changing behaviour is leading credit card companies to introduce annual fees, and Auriemma believes that the charges will be "widespread" by the end of 2010.

Megan Bramlette, a managing associate at Auriemma Consulting Group, commented: "By the end of 2010, all major credit issuers in the UK will have some sort of fee-based enhancement available to its customers."

She added: "The most successful of [these] will offer benefits that are in line with their core value proposition like in-store benefits for a retailer co-brand card, or premium seat selection and baggage fee waivers on airline cards."

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Published: 24 July 2009