Credit card holders 'ready to change'
Published On 13 March 2007
Inactivity fees will not be accepted by the majority of credit card holders, according to new research.Nearly three-quarters (73 per cent) of those surveyed by moneysupermarket.com have resolved to close their dormant accounts if the provider decides to introduce an inactivity fee. A further 26 per cent will switch to another card, leaving just one per cent who will start spending again to avoid the fee.
Many credit card holders have already been hit by balance transfer fees, late payment fees, over-the-limit fees and cash advance fees, but the new study indicates that consumers have been particularly riled by the emergence of inactivity fees.
Rob Kenley, head of credit cards at moneysupermarket.com, observed: "Consumers, with the help of regulatory bodies, are really getting tough when it comes to their finances.
"The revolt against existing charges applied to other products within a typical financial portfolio is apparent enough, but as credit card providers plan to introduce new fees, it's clear how people plan to respond."
Mr Kenley has conceded that it is extremely difficult to interpret the motivation behind the introduction of inactivity fees. While there is clearly an argument that the lenders are trying to cover the administration costs associated with dormant accounts, it also seems that some are hoping to instigate a fresh bout of card spending.
A separate report from moneysupermarket.com reveals that ten per cent of all card holders in the UK appear to have chosen an inappropriate card for their particular requirements. The advice from Mr Kenley is to spend more time researching the issue, to avoid settling for a card that will not necessarily make financial sense.
Research from payments association Apacs suggests that there are currently more than 31 million credit and charge card holders in the UK.
