Free banking is disappearing at an alarming rate
As we hear news that Egg, the Citibank owned credit card brand, is set to reintroduce an annual fee for holders of the company's credit card it appears that the days of free banking in the UK are fast disappearing. While there are those who believe that free banking was never actually available in the UK, with UK banks using consumer deposits to fund their other operations, we will start to see the introduction of more formal annual fees and charges.
Indeed, the introduction of the Egg annual credit card fee could just be the tip of the iceberg as we already have a number of UK banks charging for current accounts, overdrafts and other facilities which in the past had been available free of charge. The truth is that the Office of Fair Trading (OFT), while fighting on behalf of UK consumers, has actually unearthed a number of charges which are in effect deemed "illegal" under various definitions.
These fees themselves add up to billions of pounds a year and have in many ways subsidised other banking operations. Now that these core fees are at serious risk it is only natural that we will see other fees and charges appear in other areas of the UK banking system in the short to medium term.
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