Bank fees rose eight per cent in 2007 but fee income lagged balance sheet growth, the Reserve Bank said yesterday.Releasing its annual banking fee survey, the RBA said the growth in fee income was due more to greater use of banking services than higher unit charges.But one area where growth in unit fees drove fee income growth was credit cards.Total domestic fee income was $10.5 billion. Fee income of $6.1 billion from business was up seven per cent and fee income of $4.4 billion from households was up nine per cent.Strong areas of fee growth in the business market were bills, up 12 per cent, and merchant service fees, up eight per cent.The RBA said increases in bank bill fee income, which includes charges for arranging bank bill facilities and endorsing bills, reflected growth in bank bill issuance.The increase in merchant service fees reflected the growth in the value of credit card purchases. Fees on debit card transactions rose sharply, reflecting higher unit fees on transactions.On the household side fee income from home loans, up eight per cent, increased faster than the growth in the number of home loans. This reflected the wider take-up of loan packages, which have rate discounts and annual fees of around $300. It also reflected the fact that there were fewer waivers on loan origination fees.Fee income from personal loans was up 14 per cent, which was consistent with the growth in personal credit Fee income from credit cards was up 12 per cent in 2007 and 170 per cent over the past five years. The number of credit cards accounts increased by only 30 per cent over that period.The bulk of the increase in card fees was due to growth in annual fees, over-limit, late payment and foreign currency conversion fees.The average annual fee for a gold rewards-based credit card is $140, for a standard rewards-based card $85, for a standard no-rewards card $29, and for a no-frills card the average annual fee is $48.