Nationwide To Cut Credit Card Penalty Charge

June 6, 2006

By Peter Kenny

The Nationwide Building Society is the latest group to cut their penalty charges for late payments on credit cards.

May 31st last week was the date set by the Office of Fair Trading (OFT) calling on banks and credit card companies, to reduce the fees they charge customers for late payments of credit card accounts to a maximum of £12.

The current fees charged by the Nationwide Building Society are £20 for late payment, unauthorised overdraft and any returned items. The charges will now be reduced to £12 beginning on June 28th 2006.

The Nationwide Building society has joined other institutions like Barclaycard, Lloyds TSB, HSBC and MBNA in reducing their fees. The only major bank still not agreeing to the OFT conclusions is The Royal Bank of Scotland which also owns NatWest.

Barclaycard, while agreeing to reduce their penalty charges to £12, announced they are to increase cash withdrawal interest rates and some purchase rates due to the reduction of their penalty fee.

Nationwide ask its customers to follow these steps to avoid incurring penalty charges:

• Set up a direct debit to pay either the minimum payment or balance outstanding to ensure they never miss a payment on their credit card
• Set up a bill payment facility – available to credit card holders with a FlexAccount enabling them to pay their bill online or over the phone
• Increase their credit limit (subject to status)
• Use the internet bank where customers can access account information 24 hours a day, seven days a week, including their available balance and credit limit.

The Nationwide Building Society supplies two credit cards, the Classic Card and the Comic Relief Card. These credit cards are particularly popular for consumers who use them abroad as there is no foreign transaction fee, unlike most other cards at around 2.75%.