Friday, February 23, 2007

That grey area again.

This time it's with Lloyds introducing a charge of £35 for card holders who don't use their cards or use them sparingly. Read here.

All this has come about over the last year or so because the OFT has said they can't charge exorbitant fees for going over the limit or notification letters where the banks targeted bad users who ended up paying the bulk of the charges. This means to make up for the millions lost from the balance sheet the banks have to charge elsewhere where they were not charging before so now they are target ting the ones who don't use the cards and just keep them for emergencies. Next will probably be the reduction of the free period and a fee for those that clear off their bills in full. Because they all start doing it then there is no real competition and in reality nowhere to go to.

Of course the upside is that the more this drives people away from cards to more they move to cash and the less the banks can track your expenditure. I only use mine for what I need and use cash for what I can. Sadly, because I'm a lazy git I still spend 90% via plastic. Perhaps in their greed they will send me a £35 notice in which case I shall cancel my card. I could really benefit from this as a kick to sort out my cards. I have about seven or eight where I can hardly remember the PINs which I store in my PDA and use rarely. I could live on one card.

Now consider that banks are just a middle man because we decided to standardise on a medium that made it easier for us to trade with. Now they are raking in the money. Complain and you get kicked out. Someone looks at their scandalous charges for a letter and they get you another way. Think it will be any different when we are forced to start using carbon credits. It'll be another cartel and this time you will be forced to pay the £35 and nobody will protect you from £25 letters either.


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