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Lloyd’s TSB will charge for not using credit cards

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by Elaine Frei

Lloyds TSB will charge for not using credit cards

Along with its full-year profits report, Lloyds TSB (LSE: LLOY) has announced that it will begin charging its credit card customers for not using their cards. The bank said that it has notified 50,000 customers who use their cards very little or not at all that they will have to pay a £35 per year beginning 30 days from when the letter was sent.

Lloyds did not define exactly what “low usage” means, but said that customers who do not use their cards at all could certainly expect the charge. Those customers who want to avoid the fee must cancel their account by destroying the card and asking the bank to close their account. A spokeswoman said that there was no point in having a card if one is not going to use it.

The move by Lloyds is part of a larger move by banks and credit card companies to charge annual fees and for switching debt from one card to another. Analysts believe such moves are an effort to replace losses incurred when the Office of Fair Trading (OFT) told credit card providers that they must charge lower fees for missed payments.

In their annual profits report, Lloyds said that its profits before taxes in 2006 were up 11 percent from the year before, to £4.25 billion.

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News posted: February 23, 2007

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