Credit Card Industry Aims to Profit From Sterling Payers
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.
via Credit Card Industry Aims to Profit From Sterling Payers – NYTimes.com.
I don’t do credit cards. I know I should have one for emergencies and to book rental cars and things like that, but I don’t like credit cards, and I don’t want to carry one. This story reconfirms that for me, as does the fact that my Mom’s credit card company just tried to scam her like this last week. They arbitrarily changed her billing cycle, and they must have shortened it dramatically. She paid her credit card bill in full (a whole $26!) and was shocked to get a notice that she had been one day late on the payment. For this – one day late – she was charged a $19 late fee and $2 in interest. So, $21 in fees on a $26 bill. She called and complained and they dropped it, but I don’t know that everyone would pay that kind of attention.
My mom is particularly scrupulous about paying bills, and she pays them as soon as they arrive, so so knew there was no way she had actually been late. But this kind of thing sickens me. I think that credit card companies will be the next big wave of greedy jackasses that we have to bail out – all because they want to give free money to people who can’t pay it back, so that those people will be chained to their penalties, fees and high interest rates for life. Now that they’re cracking down on them abusing stupid poor people, they’re going to start trying to abuse good but unobservant customers. Just be aware, and keep a close eye on your statements.
Filed under: anti-socialism, corporate malfeasance | Comments (3)3 Responses to “Credit Card Industry Aims to Profit From Sterling Payers”
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Overall, I’ve not had any real problems with them, though one thing that I find mildly disturbing is their policy of increasing your credit limit when you haven’t asked them to. I first got my credit card with this bank when I was 19 – it had a limit of £250. I have never asked for an increase, and there were times many years ago that I was just managing the minimum payment each month. Finally I got it paid off with some lump sums. Each time, they then increased my limit (usually just before Christmas or the summer holidays). So after starting with a £250 limit and never asking for an increase, my limit now is £15,000. I would never use that amount because of the interest but I know people who would use it even though they also couldn’t afford the interest on it. The CC’s are sneaky bastards the whole world over.
If this sort of thing you’re describing starts over here in the UK though, then I will happily tell them to stick it and take great pleasure in posting it back in pieces. Actually, I got a shredder a few months ago, so that would be even better – show them I really mean business!
Do they flood the university campuses over your way with credit card applications? They were everywhere when I was just starting school.