The Month That Was May 2006

June 5, 2006

By Julie Ann Amos

The UK’s incredible credit card industry continues to forge ahead amidst the maze of procedural pitfalls and fickle consumer behavior. Warnings, declarations and reports; we bring you the latest on the flourishing plastic money industry and the turbulent course it followed in the month of May.

The OFT’s (Office of Fair Trading) consistent drive to protect the user’s interest finally triumphed this month. An official news release declared slashing of the penalty fees, capping the new fees at a reasonable ₤12. The credit card users got a major respite from the spiralling rate of penalty fees, with houses like HSBC and Lloyds TSB already taking action on this, with the Barclaycard falling close in line, implementing the same from August 1.

You can gauge the stringent nature of the declaration from the fact that the OFT has even threatened legal action against the non-complying banks.

However, some of the price comparison reports also reveal that the lower charges for the late payment of credit card bills could alternatively mean higher rates of interest for the customers. So we suggest the consumer better watch out and tread with caution.

Adding on, the anxiety over unsecured national debts reached new alarming heights with the Barclays reporting some really disturbing statistics. Figures indicate that the customers at Barclays are defaulting on ₤1 out of every ₤5 that they owe, which is indeed a grim situation. Trading reports reveal that the Barclaycard is the largest and most widely marketed unsecured credit card suppliers in the UK.

On the other hand, the soccer fans got a warning of sorts with reports indicating major cost implications to those traveling to Germany to attend the World Football Club this summer. The report advises the user to choose a card that can be used abroad for free to avoid being incurred the foreign currency loading fee, which could be an average of ₤60 for a four-night stay in Germany.

Meanwhile, the Abbey managers found themselves in a tight spot when an unintentional computer glitch caused thousands of customer overdrafts to be cancelled. The action left the customers panicky with unauthorized and hefty overdraft fees and additional fees of cheques and direct debit payments. However, the authorities were quick to react; issuing apologies and even announcing prompt refunds to those who had already paid up.

Continue to Part 2

The Month That Was May 2006 Part 1
The Month That Was May 2006 Part 2
The Month That Was May 2006 Part 3