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Saturday 20th of March 2010
May 23, 2007    

Barclaycard considering “low usage” fee

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by Elaine Frei
Barclaycard considering "low usage" fee

Barclaycard, owned by Barclays plc (LSE: BARC; NYSE: BCS; TYO: 8642) has said that it is looking at charging customers who only use their cards once in awhile or who do not use it at all. It says that the fee would only be introduced as a “last resort” if a campaign to get cardholders to use their cards more - and so avoid the fee - does not work. Barclaycard would not say what level of usage would qualify a card for the “low usage” fee, which could be as much as £20 per year.

Barclaycard would not be the first card provider to levy a low usage fee. After a warning that it would do so, Lloyds TSB (LSE: LLOY) began in February of this year to charge 50,000 low usage accounts £35 per year. As with Barclaycard, Lloyds declines to define its criteria for an account that qualifies for the fee. With 9.8 million cardholders, a 15 percent market share, Barclaycard is the biggest provider in the UK. If it decides to implement the fee, it would make it much more likely that other card providers would follow suit.

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