Annual fees set to return

Accountants PricewaterhouseCoopers (PwC) have suggested that annual credit card fees are likely to be reintroduced in the near future.

The fees were largely abandoned in the 1990s, but card companies are likely to start charging them again in order to combat 'rate tarts', people who move debts from one card to another and as a consequence of increased regulation.

The 'Precious Plastic 2006' report from PwC estimates that 'rate tarts' have cost card companies £600m this year, despite the widespread introduction of a balance transfer fee of 2 per cent.

Card companies have come under greater scrutiny of late, in particular regarding the high penalty fees for late payment. This will probably force banks to levy lower charges in the future, but the PwC report suggests that annual fees are likely to emerge as a way for lenders to claw back some money.

In October, the MBNA credit card company introduced annual card fees for a number of its customers.