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 ...
Agreed. I think this is more a ploy as leverage against this legislation. They won’t have any on time customers left.
I presently use a CC, I pay off the entire balance monthly and I just got a cash back bonus of $650. If they begin to penalize me the CC will get cut up into small pieces.
You, me, and millions of others of their (current) customers. This is a trial balloon to see how much outrage is stirred up. Competition will see that it doesn't happen.
Banks still charge merchants 5% to 7%, even as their profits and productivity go up. Paypal, hardly a great option, is a relative bargin at 2.1%, I believe.
I expect to see more problems in credit card charge appeals and getting to a human on 800 lines. Also, watch out for tricky language regarding on-line transations. One credit card I had tried to eliminate charge appeals for merchants who were more than 50 miles away.
Same for us and if they charge us we will use cash or debit card.
Lots (65%+) of this can be traced back to Illegals.....who bought home, had credit card, our schools (going broke because of illegals kids in schools), healthcare, welfare by illegals. They got all of this and lots of them just pulled up and left.....bills and all. If our Congress would tells us the truth housing is 65%+ illegals that are upside down in these homes. And they just left us holding the bag ie TAX PAYERS!
At least you got the notice. Credit Card Companies are not required by law to notify you of the cancel. I found out two dropped me after credit bureau review.
I'm lucky!!?? They wanted to raise the interest rate on my credit card to ~26% and I also have extremely good credit!!!
I didn't doubt your word, I'm just really surprised to learn that there are debit cards with fees. I've used the same credit union for 40 years and got a debit card from them whenever they first started issuing them, I don't remember the year but it's been a long time. I have never been charged a fee. I watch my account closely and there is no "hidden fee"
My card is Visa though, I wonder if that could be the difference?
I guess I might have worded that wrong, I meant that they only doubled yours...they tripled mine. And you didn’t say in your post what the final result (26%) was, so I didn’t realize it was that high. I was pissed about the 12.99% given I have 5 accounts with them and have been with them for over 20 years.
I learned that the hard way by trying to pay for a $1500 purchase. My own fault though because the "limit" is mentioned in the paper work.
Bump!
More here:
Good news: Responsible credit-card users to “subsidize” deadbeats now
Debit cards usually have a daily limit, no matter how much money you have in the account.
Soon to be replaced with the Chinese Ying-Yong or whatever they call their currency.
Well said.
Oh, woe is you when you try to cancel them. Cutting them up doesn't do the trick. Calling and canceling doesn't either. I've had a card company rep argue with me over the phone that I could not cancel, even though there was zero balance. I did eventually get that one canceled but what a hassle.
Sit down, right a letter to each one, provide your account number and your signature, send it via U.S. mail, "return receipt requested", ask for a letter from them via U.S. Mail, verifying that they have indeed canceled it. By law they have to provide that upon request.
If they tell you over the phone that they have canceled it, chances are great that they are lying to you and you will learn of it the next time they send you a solicitation to buy "credit card protection" for your account, mentioning the last 4 digits of the account you thought you had canceled.
Then alert the credit bureaus that the accounts are closed, because most likely the credit card company won't do it.
This is the IDENTICAL scam with the home mortgage loans that Barney Frank and co. forced on the banks.
The banks sold off the notes in bundles of high default mortgages.
The government is doing the SAME thing expecting a different result.
eventually the fed is going to have a government sponsored credit card for all people (comrades) who have needs but no ability.
I got a new credit card one week ago that I’m already regretting. I got hearing aids, cost $4140. They explaind to me that I could make pymts and if paid off in a year there would be no interest but it involved getting a G.E. credit card.
I knew I could pay it in a year and could have payed it on the spot but I went for the zero interest for a year. The card came in the mail a few days ago and the papers stated that if it’s not paid in full within one year the interest rate is 22.9% and it’s retroactive on the full amount.
I still have no doubts that I would pay it in a year but have decided to pay it in full right now and start working on getting the damn thing canceled.
It is the typical credit card with the strip on it with a number to call to activate the card. I’m wondering what will happen if I don’t call and activate it? The hearing aids are already in my ears and I owe somebody for them and will certainly pay for them. But I guess I charged them before the card was even activated.
On occasion I suppose everybody does something they regret, this is one of my “somethings”.
The hearing aids are terrific by the way. I should have done it 10 years ago. I am 63 and it’s time for me to start getting old people stuff.
I was talking as a general rule, I’m sure some will but most wont.
I think their best customers know that they must let the renter know they aren’t a slug that might chump them.
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