According to Debt Counsellors, a company that offers consumer debt advice, credit card holders should not be swayed by the OFT's recent mini-victory over card issuers, and instead they should avoid credit cards altogether.
Debt Counsellors believes that consumers should take steps to eliminate credit card debt completely rather than take comfort from the fact that several card providers have reduced their penalty charges.
The advice agency is concerned that consumers will be erroneously reassured about the extent of their debt exposure after the OFT told providers to reduce their penalty fees.
The concern stems from the fact that many card issuers have already taken steps to maintain their income by shifting consumer costs to other areas such as higher interest rates.
Meanwhile, some issuers are refusing to toe the OFT’s line. According to a report from CardLine Europe, Royal Bank of Scotland has refused to accept the GBP12 fee limit stipulated by the OFT.
An RBS spokesperson told CardLine that the bank has no plans to reduce its fees from their current level of GBP20. According to the spokesperson, the bank informed the OFT ahead of the May 31 deadline that will take no action unless compelled to do so.