April 5, 2006

By Peter Kenny

The Office of Fair Trading (OFT) has announced today that credit card companies will have to cut some penalty fees charged to consumers.

In a statement released today, the OFT said, "Credit card default charges have generally been set at a significantly higher level than is legally fair"

"The OFT now expects all credit card issuers to recalculate their default charges in line with the principles set out in a statement published today and to take urgent action where needed to reduce the level of credit card default fees,"

It is estimated that the cost to credit card companies could reach £400 million each year. The current penalty charges range up to £25 per item and are charged against late payments, bounced cheques and unauthorised overdrafts. The OFT recommend penalty fees be reduced to £15 per item.

For more information on credit card charges please read our article click here Credit Card : Hidden Extras In The Small Print