A financial expert has said that banks may start to increase their charges on credit cards, personal loans and fee-paying accounts because of the recent ban on payment protection insurance (PPI).

The Competition Commission brought in the ban of the insurance scheme to stop banks from adding the cost of cover for repayments to consumers' debt, and providers must now wait seven days before contacting customers.

Brian Brown, head of research at Defaqto, told the Daily Telegraph that banks will merely make up the lost revenue elsewhere, charging higher rates and fees for their financial products.

He told the newspaper: We are seeing historically low interest rates but banks are keeping their margins on personal loans, credit cards and fee paying accounts . Part of that is that they are not making money from PPI and need to make it other ways.

High street bank Abbey recently re-launched its zero per cent credit card which also offers charge-free foreign usage for those wishing to get away during the summer .