Credit Card Issuers Getting Creative with Their Fees
To make up for lost revenue credit card companies are now becoming ever more creative. Now we are seeing that Bank of America will “experiment” next year by charging a supposedly small number of their customers annual fees.
They have stated that they will be charging between $29 and $99. More than likely the cardholders that do not carry balances or have never been charged late fees will be the ones that will be the subjects of their experiment.
It’s pretty bizarre that they would call this an experiment. I think more accurately stated is that they’re trying to see what they can get away with without customer backlash being so severe that it further hurts their business.
Not to be outdone Citigroup has begun charging annual fees to cardholders that aren’t using their cards enough. We have seen other banks also charge inactivity fees while some have closed cardholders accounts altogether.
There’s little doubt that we will be seeing more and more of these types of moves from members of the credit card industry in response to the fact that their ability to raise interest rates in the future on existing balances will be severely curtailed by credit card reform.
The trend has begun in earnest already. Here’s how it breaks down so far:
- 27% of cardholders have seen an interest rate increase
- 19% have seen increased fees imposed upon them
- 17% of cardholders have seen their credit limit cut
- 17% have seen their minimum payment threshold raised
- 12% have had their rewards programs reduced
These are important points to keep in mind the next time you apply for a credit card. Now more than ever you want to be doubly sure of what the terms and conditions of a specific offer is before you complete the application.
We suspect that when things shake out and the dust settles after all the credit card reform provisions go into effect, we will be in a much better position to judge which offers are quality and which should be avoided. But for now… let the buyer beware.
Related Information:
- Consumers Are Angry with Credit Card Issuers Consumer anger with credit card issuers has reached a new high....
- What to Do If You Suddenly Get Hit With Credit Card Fees Credit card fees are becoming more and more popular. Read our article to see what you can do about them....
- Higher Credit Card Fees Introduced By Banks The trend is not good for credit card account holders as banks continue to raise fees on them....
- Credit Card Issuers Are More Open to Debt Management Plans Credit card issuers willing to work out debt management plans with struggling cardholders....