Credit companies’ profits drop 43%
Profits of British credit card companies plummeted by 43 per cent last year when compared to the previous figures in 2005, it was revealed this month.
According to banking analyst Lafferty, profits for all collective UK credit card companies amounted to just £1.16 billion in 2006.
The fall in profits highlights just how much the industry relied on overcharging customers for fees such as going overdrawn or sending letters to customers, which were capped at £12 in spring 2006.
In the past year there has been much criticism of credit card companies over their attempts to introduce new ways of charging customers, which have been dubbed as cynical and unfair exercises by consumer groups.
The figures now put the UK credit market in the bottom third of global credit markets in terms of profit, with credit companies now only making an average of £16 per customer, compared with £27 per customer in 2005.