Lloyds TSB is to levy a £35 charge on its credit card holders who never use their cards, or use them only occasionally.

The bank has written to 50,000 customers to tell them that the charge will be applied within 30 days of the date on the letter. Some observers have commented that this makes it even more important that people compare credit cards before selecting a product.

Lloyds TSB refused to be drawn on what constituted ‘low usage’, but it was adamant that people who did not use their cards at all could definitely expect the charge to be levied on their accounts.

A spokesperson for the bank commented: “This fee only applies to customers who do not use their cards, as there is after all little point in having one if you are not going to use it.”

To sweeten the pill, Lloyds TSB has offered customers who beging to use their cards more regularly a 0% interest rate on purchases until May 2007. “This should be factored into any credit comparison for those who are considering switching cards,” said a spokesperson.

The move by Lloyds TSB is part of a noticeable trend on the part of credit card providers to charge fees and levy a fee on those switching their debt from other cards.

Many observers believe this is a reaction to the massive loss of revenue caused by the Office of Fair Trading (OFT) ordering the credit card companies to cut their default fees from around £30 to £12.