Credit card holders prefer penalty fees

by Gill Montia

Story link: Credit card holders prefer penalty fees

Moneysupermarket.com, the price comparison website, has published the results of a study that shows credit card holders preferring to pay penalty fees rather than a monthly or annual fee.

Only 12% of respondents to the survey would like penalty fees to be replaced with other charges.

This is surprising because in 2006, 23% of credit card holders paid penalty charges that amounted to £230 million in total.

However, it was last year that the Office of Fair Trading ruled that the charges should be capped and some credit card providers are now considering changing their fee systems.

Rob Kenley, the head of credit cards at Moneysupermarket.com, believes that this could prove unpopular with consumers and that credit card providers will need to offer higher cash back rewards to keep their customers.

Separate research from Abbey Current Accounts suggests that credit and debit card users are not only struggling with penalty charges but also with PIN numbers.

Large numbers of people rely on remembering the PIN, with around two million try to mentally retain five numbers or more.

However, Abbey stresses that despite millions of card holders forgetting their PIN every year, committing the numbers to memory is the best way to help prevent fraud.