Annual fees set to become part of everyday life

June 7, 2007

It is thought that whilst annual fees are currently just a threat to millions of consumers, by the end of the decade they will be part of everyday life. Banks and credit card companies have lost a lot of profits through complaints and since various fees have been stopped by UK watchdogs. This means that they are constantly looking at ways in which they can make those fees back up and annual fees are one of them.

There is certainly no doubt that these charges will come into play and it is all just a matter of when. It has been reported that Barclays is going to be one of the first banks to introduce these charges and these charges could be anything up to £275 a year. That is a lot of money for most people to afford and the move is certainly not going to be popular.

So will some banks take advantage of these changes and simply not charge the fees? It is an option which they may be considering as whilst slapping annual fees onto customers will make up lost profits, there is also a gap for banks to gain potentially thousands more customers by keeping things the way they are.

If Barclays put annual fees onto their services for example and another bank didn’t, customers would be more likely to close their accounts with Barclays and join up with the other bank. It is certainly a good potential amount of profit to be made and so it remains to be seen whether some banks will take advantage of these changes.

Overall annual fees are not very welcome at the moment but that will not stop them from being introduced. By the end of the decade we will be used to these charges but just how many will accept them and will some banks think twice?