Watch out for rising number of credit cards with annual fees

It was recently announced by the Internet credit card giant, Egg, that it was launching a credit card that came with a £1 monthly charge, which although not a huge sum amounts to an annual fee of £12 a year for cardholders. Following the announcement many industry officials have said that this could be the start of something big, and that as well as Egg credit card, many other credit card firms may follow suit and start applying monthly or annual fees to cardholders.

Consumers that are taking out credit cards should therefore be extra vigilant in checking whether there is any monthly or annual fee that comes with the card, and if so how much this fee is going to be. For many consumers the only important information is the obvious - interest rates, minimum repayment levels, and the like. A great many of us fail to check the small print to find out about things such as annual fees.

One industry official recently stated: "Egg is the first major credit card provider to introduce fees on mainstream products, and this is only the tip of the iceberg. We are likely to see more providers follow suit as they try to claw back profitability following the launch of the Consumer Protection White Paper last week."

Those planning to apply for a credit card could benefit from bearing these comments in mind, and ensuring that they check any credit card marketing material to find out whether any annual fees are charged before making an application for the credit card. This will help to avoid any nasty shocks, and will help to ensure that you know exactly what you are signing up to when you apply for the card.

Also, bear in mind that whilst some credit card firms may offer features and benefits that justify the annual or monthly fees some may simply be charging the fees to boost profits. As one industry expert stated: "Ever since credit card penalty fees were capped at £12 back in 2006 we have seen a hike in cash withdrawal fees, foreign usage fees and balance transfer fees - monthly fees on top of this will just be rubbing salt into the wound.".