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Low usage fee hits credit card holders
10 March 2008
Financial services company Halifax has charged customers a £25 fine for not using their credit cards, according to a report in the Sunday Mail.
The new fee comes as short term credit becomes increasingly difficult for institutions to obtain on the international money markets – a major source of funding for banks.
A spokesperson for consumer group Which? told the Sunday Mail that such moves are likely to be a feature of the financial environment until some stability comes back into the market.
"Credit card companies and banks will want to drop high risk customers but they will also want to get rid of those who aren't making them money," he added.
According to the Sunday Mail report, when Egg cancelled 161,000 credit cards earlier last month citing high risk customers, it also took the opportunity to target those who cleared their balance at the end of each month.
Halifax defended the claim saying: "Low usage fees are a feature of the market. As with any account, there is a cost of maintaining and administering cards. Customers are notified of the fee. They have the choice to either make use of their card or close the account."
The total credit card debt in Britain to the end of December 2007 was £54.9 billion with a £177 billion credit limit. 
