A report published today has indicated that credit cards could soon be used by the well-off as status symbols.
The report is an annual analysis of the credit card market by accountancy firm PricewaterhouseCoopers (PwC). PricewaterhouseCoopers predict that annual fees will become much more common in the future. Interest rates are also predicted to rise. Wealthy customers will pay for their cards and in exchange receive benefits, such as, shopping discounts.
In the 1990s paying an annual fee on credit cards was common. At the turn of the century credit card providers decided to offer aggressive pricing such as zero and low interest rate offers.
"We reached a point when more people had a credit card than didn't and when the number who had more than one outweighed the number who had none," Sandra Quinn of the UK Cards Association said. "That was when they [cards] stopped being a status symbol."
Now with mounting bad debts and increased regulatory pressure, requirements on credit card providers could actually lead to return on the days when borrowers were required to have a high income to get a card, according to PwC.
"Lenders will focus on [customers] that are the most profitable, rather than those that are in the most need of credit," said Richard Thompson, a partner at PwC.
