Card firms recoup £50m in penalty fees

Revenue generated by credit card penalty fees for missed payments reached £50 million during the past six months, according to new research.

A study by MoneyExpert.com found that as many as 4.1 million monthly payments on credit cards were either missed or were late during the first half of the year, with many lenders charging £12 for each missed payment.

Sean Gardner, chief executive of the firm, said that if someone is already struggling to afford their regular bills, penalty charges create additional financial pressure.

"Anyone in trouble needs to take action now because the situation will only get worse if they bury their heads in the sand. They need to get their debts under control and cut their spending," he remarked.

The UK's payments association Apacs, recently reported that £321 billion was spent on plastic cards in 2006, with this form of payment now accounting for nearly a third of all consumer spending.

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