Why cheaper payment protection insurance could mean higher bank charges
- 20TH MAY 2007
The Office Of Fair trading recently ruled that all default credit card charges should be reduced to £12, which is roughly half of what consumers had been charged up until that point for missing payments or making later payments. This is just the latest move that has seen regulating bodies striving for fairer treatment for consumers.
At the moment, the Financial Services Authority and the Office Of Fair Trading seem to be introducing measures to revolutionize banking and enhance the consumer experience. The first step was of course highlighting how existing payment protection insurance policies and sales processes unfair. Many consumers had been misled on the relevance of payment protection insurance to their personal situations and could never have successfully claimed, such as the retired or part-time workers.
Payment protection insurance and the new credit card charges have meant that banks and lenders have experienced a major blow to their profit margin as both factors have been significant over the last few years. As a result, there is now speculation that banks will introduce annual or monthly fees for holding a current account and/or credit card, which may actually see individuals spiral further into debt and thus face more severe problems should they ever be unable to make repayments.
Specialist payment protection provider British Insurance can go some way toward giving individuals peace of mind because they can protect an individual’s credit card and loan repayments with a low monthly fee. For example, their loan payment protection insurance is actually 80% less than other providers and thus may just give an individual the reassurance they need in times of financial crisis!
