The fee will applied to its Platinum cashback credit card, and is to be introduced to existing customers from 1 October 2009, and immediately to all new customers and is being enforced to cover administration costs for maintaining an account that is left inactive.
American Express also plans to lower its top tier cashback available to new customers from 1.5% to 1.25%, while increasing the spending limits required to qualify for cashback from £2,400 to £3,000 a year.
Amex will also be increasing the levels at which customers are eligible for cashback starting 1 October, from £12 to £25. This will mean that customers will need to spend £4,250 to get a payment instead of the current level of £2,500.
An Amex spokesperson said customers would be charged the new dormant fee would "once existing cardholders who haven't used the account for more than a year pass their card 'anniversary'".
Tom Allder, Amex's vice president UK lending, said he was confident the card was still the best on the market for customers that use their card on a regular basis, but the new changes were required in order to reduce costs.
"Rather than making changes across the board we have looked very closely at card member usage to ensure that we continue to offer the best proposition we can for our existing card members," he said.
"What this means is we have been able to safeguard the 1.5% top rate for existing customers while still offe
Amex is not the first credit card provider to introduce this kind of rule, as rivals Santander and Lloyds TSB charge their customers for low usage. Both the Santander Zero credit card and standard Santander credit card come with a fee a £10 if they remain unused for six months. Lloyds TSB charges its customers a £35 annual fee across its range of credit cards.
This type of fee is likely to become more common in future, as credit card providers feel the crunch, according to David Black of financial researcher Defaqto.
"A mix of bad debt write-offs from customers, fraud, and costs of running empty accounts means margins are being squeezed for many card providers," he said. "Introducing dormancy fees is a way to cover this."
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