MBNA latest provider to cut charges

American credit card provider MBNA has become the latest addition to the list of companies reducing their late payment charges to £12.

Previously the organisation charged £25 when its customers defaulted on repayments, but following an Office of Fair Trading (OFT) initiative MBNA will join companies such as Lloyds TSB in reducing its charge.

HSBC, Halifax Bank of Scotland, Egg and Cahoot have also said they will reduce their late payment charges.

The OFT made its ruling in March that late payments fees approaching £30 were “legally unfair” and cost consumers more than £300 million per year.

While the MBNA confirmed that it would reduce its fees as of June 28th, it stated its disagreement with the OFT’s conclusion that higher charges were legally unfair.

The company maintained that its fees have consistently been “fair, transparent and legal”.

Among other financial providers, Nationwide is expected to outline its position later this month, while the Royal Bank of Scotland is expected to follow the trend of reducing fees.

Barclaycard is also expected to cut its charges at the beginning of August, while Capital One has as yet refused to comment.