Posted on 05/19/2009 5:06:46 AM PDT by reaganaut1
Credit cards have long been a very good deal for people who pay their bills on time and in full. Even as card companies imposed punitive fees and penalties on those late with their payments, the best customers racked up cash-back rewards, frequent-flier miles and other perks in recent years.
Now Congress is moving to limit the penalties on riskier borrowers, who have become a prime source of billions of dollars in fee revenue for the industry. And to make up for lost income, the card companies are going after those people with sterling credit.
Banks are expected to look at reviving annual fees, curtailing cash-back and other rewards programs and charging interest immediately on a purchase instead of allowing a grace period of weeks, according to bank officials and trade groups.
“It will be a different business,” said Edward L. Yingling, the chief executive of the American Bankers Association, which has been lobbying Congress for more lenient legislation on behalf of the nation’s biggest banks. “Those that manage their credit well will in some degree subsidize those that have credit problems.”
As they thin their ranks of risky cardholders to deal with an economic downturn, major banks including American Express, Citigroup, Bank of America and a long list of others have already begun to raise interest rates, and some have set their sights on consumers who pay their bills on time. The legislation scheduled for a Senate vote on Tuesday does not cap interest rates, so banks can continue to lift them, albeit at a slower pace and with greater disclosure.
“There will be one-size-fits-all pricing, and as a result, you’ll see the industry will be more egalitarian in terms of its revenue base,” said David Robertson, publisher of the Nilson Report, which tracks the credit card business.
(Excerpt) Read more at nytimes.com ...
They’ll likely try it, but scale back if they see too many creditworthy people stop/slow the use of their credit cards.
It’s not against the law if you tell them they can do it. They just can’t go in and do it without your permission.
If you do pay off every month, the interest rate doesn’t matter.
I realize that’s not always possible, but if you can reach that point, the rate no longer matters.
There is a difference between having the account activated and having the card activated.
The debit card is not free, my issuer charges 12.00 a year
That’s the first I’ve heard of an issuer charging a fee for a debit card.
And while you will eventually get that money back (less $50), and even have most overdraft fees (if any are accrued) refunded, it is a time-consuming pain in the butt.
And for the two weeks or so you have no cash in your checking account, you'd better have a credit card or some other source of funds to live on.
Because of all the online shopping I do, the protection credit cards afford is worth their minimal cost.
Of course, if that cost rises in the future, my opinion may change.
And while you will eventually get that money back (less $50), and even have most overdraft fees (if any are accrued) refunded, it is a time-consuming pain in the butt.
And for the two weeks or so you have no cash in your checking account, you'd better have a credit card or some other source of funds to live on.
Because of all the online shopping I do, the protection credit cards afford is worth their minimal cost.
Of course, if that cost rises in the future, my opinion may change.
Actually, I have not had that problem although I always anticipate it. For that very reason I have a savings account linked to my checking account. It covers any overages at no charge (fees)to me. Thus far, I haven’t had a hotel place a large hold on my card. I stay in hotels several times a month and it really hasn’t been a problem.
I try to avoid renting cars at all costs because I can usually take public transportation for much less than car rental costs.
I didn't think they could do that anymore. I had that set up with my bank but a year or two ago they changed it to a credit account which is charged for every overdraft.
I thought the change was required by law, but maybe I read the legalese wrong.
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