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 ...
Another INFERIOR plan from an INFERIOR government run by an INFERIOR leader.
It is a specious argument to charge good payers fees for card use.
The use of the card is the biggest revenue generator for the card companies, because of the percentage fee of each purchase they charge the store or service provider for accepting the card.
Car rentals are CC only now because drug dealers were renting cars to transport drugs. That way the Feds couldn't take their car if they got busted.
Just like the auto industry, it appears the cc companies are listening to the wrong people—the fed govt. The people with “sterling credit” that they are now going after to subsidize riskier cardholders will just dump the cards as soon as they can, leaving the cc companies holding the bag with the risky cardholders. Can you say bankruptcy?
Government NEVER figures that people react to their actions. They are baffled when their best laid plans backfire because people figure out a new way to do what they have to do. Freedom always wins in the end.
“I rent hotel rooms on a debit card all the time. I’ve never had a problem.”
You must either be staying in less expensive hotels or only staying for a night or two. Debit card had a daily limit on them. Two or three times I have had problems paying for a hotel room with a debit card. Once I tried to stay in the Marriott on Broadway in Times Square in New York. The room was $430 a night. Couldnt put it on my debit card.
You are lucky...they just went from 4% to 12.99% on mine and I have sterling credit. I am planning on moving all of my accounts to the Credit Union that is financing my truck.
“Those that manage their credit well will in some degree subsidize those that have credit problems.”
another form of Transfer of Wealth from those who worked hard for it to those who vote democrat.
They try this crap, I cancel the card.
I only use my credit card because of the cash-back rewards. I get a few hundred dollars a year in cash back and I have never made a late payment. For the most part, I don’t understand people who buy things they can’t afford, especially with a credit card. There is no way I will subsidize such people. I’ll simply use my debit card instead.
Smart responsible people will find a way around this newest outrage...
People will dust off the old check books - before they'll pay interest from day one...
I don’t have to use a credit card for anything other than plane reservations and renting a car or hotel.
Does the airline reservation desk accept debit cards? I thought only credit cards because of Homeland security?
If that’s the case, I’ll cancel my credit cards.
The heck with them. It looks like we are going to be paying for massive tax increases while the ants dance.
They wont take a debit card!
Not true. I quit using credit cards and last year rented a Lincoln Town Car on my debit card. There was some hoo-ha about a charge in advance, but as I had a comfortable balance in the account they skipped it.
During hurricane Ike I rented a hotel room, and paid in cash. I was there for a week.
The credit card companies used to be useful. Now they are grasping crooks. F' 'em.
I’m with you, I use credit cards for convenience and if I’m penalized I can bear the inconvenience of cash and checks or a debit card.
Cash? It’s a matter of time when that will non-existent. IMO
We will be required to have a card then they can do this.
I went to my bank website and they saying nothing about charging for the Debit Card. The first 12.00 slipped by me but when the magnetic wore out and asked for replacement, another 12.00.
Debit MasterCard®
With the Debit MasterCard®, you can pay for your purchases and get cash 24-hours a day, 7-days a week anywhere MasterCard® is accepted. Debit MasterCard® purchases are deducted directly from your checking account and reported on your monthly statement. The Debit MasterCard® has an annual fee.
You ain't the only one.
I think that this is just a big bluff. Unless the gov't winds up issuing credit cards (not THAT big a stretch, I'll admit), chasing away customers who want to pay is generally not the best business model for a company.
Of course, if gov't mandates something stupid....all bets are off.
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