Credit Card Industry Aims to Profit From Sterling Payers

[GoldieAZ]

 

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.

...
People who routinely pay off their credit card balances have been enjoying the equivalent of a free ride, he said, because many have not had to pay an annual fee even as they collect points for air travel and other perks.

“Despite all the terrible things that have been said, you’re making out like a bandit,” he said. “That’s a third of credit card customers, 50 million people who have gotten a great deal.”

...
A 2005 report by the Government Accountability Office estimated that 70 percent of card issuers’ revenue came from interest charges, and the portion from penalty rates appeared to be growing. The remainder came from fees on cardholders as well as retailers for processing transactions. Many retailers are angry at the high fees and plan to pass them on to shoppers once the Congressional legislation takes effect.

http://www.nytimes.com/2009/05/19/business/19credit.html?_r=1&hp

Once again the fiscally responsible people will have to pay for the irresponsible.

This congress needs to be tarred and feathered.

[JohnnyReb]

I has duh solution....use only american cash....don't leave home without it.

Now that right there would go a long way toward reviving the paper and printing industry...............just think about it a minute.

[seabelle]

Once again the fiscally responsible people will have to pay for the irresponsible.

This congress needs to be tarred and feathered.

This is what the Tea Party movement is about and with hopes there will be many more showing up for the July 4th events!  And the Sept 12th events too.  I'm so sick of the  Daily Obama Hypocrisy.....D'OH....lol.  Here's the most recent:

~Michelle hops on AF1 to fly to New York to cut a ribbon on a museum and says "the arts are good for us" !?  The cost of that little trip would probably have saved some local symphony orchestras

~Barry tells us we have to buy cars that get 35+ mph, after taking the presidential motorcade out for a hamburger ?

......now I'm being punished for being fiscally responsible? 

[Splashdown]

Once again the fiscally responsible people will have to pay for the irresponsible.

This congress needs to be tarred and feathered.

That is the whole backbone of the present administration: Everything from bank and mortgage bailouts, to health insurance, to credit card companies, to the automobile industry. Working hard, being responsible with your money just doesn't pay.

What is it about Democrats, and those who give Obama his 60+ approval rating, that doesn't ever take that next logical step to look at consequences of actions????

[NHSparky]

I've had one CC curtailed and been told that another won't be renewed when it expires in two months.  And talking to folks, I'm the rule, not the exception.

Is this the "stimulus" that Obama was going for?

[Chris_]

Simple solution from those of us that pay their CC bills in full every month.......start charging fees and I'll cancel the cards, and hold up the check-out lines while I write a check.....or pay cash, and the companies will lose the comissions on what I buy with the cards......

Perhaps they will go back to the days when the only way you could qualify for a card was if you had excellent credit to start with.......

doc

[Splashdown]

Isn't a Visa Card a civil right?

[Chris_]

Isn't a Visa Card a civil right?

Only to a lib.......

To the rest of us it is merely a convenience.........

doc

[DumbAss Tanker]

Well, it'll be a good reason to finally cancel some cards that are paid off and no longer needed, instead of just leaving them sit in the background.

[Lacarnut]

USAA has never charged annual fees. So the rest of them can go pound sand.

[GoldieAZ]

Well, it'll be a good reason to finally cancel some cards that are paid off and no longer needed, instead of just leaving them sit in the background.

So long as they don't start charging an annual fee, I will keep my credit cards. Closing cards you will lower your FICO score.

[5412]

Simple solution from those of us that pay their CC bills in full every month.......start charging fees and I'll cancel the cards, and hold up the check-out lines while I write a check.....or pay cash, and the companies will lose the comissions on what I buy with the cards......

Perhaps they will go back to the days when the only way you could qualify for a card was if you had excellent credit to start with.......

doc

Hi,

I pay everything I can by CC because I get from 1-3% cash back which comes in handy at Christmas time.  The good news is there is still competition among CC companies.  The folks who are fiscally responsible can cancel their CC's so what do they end up with but a potful of loans to marginal folks.  All it will take is one CC company to break the trend and not charge fees and they will end up with the lions share of the business.

I would also guess that the cancellations will be overshadowed by many more folks who will just cut the darn things up and they will never know they cancelled.  I love that because then it costs them money until they figure it out.

regards,
5412

[Karin]

Did you know there's a rider in this bill allowing you to carry a loaded, concealed weapon onto National Park properties?

As for CC's, this is why it's a good idea to always position yourself not financially vulnerable to anyone except yourself.  You never know who's going to be elected and turn shit upside down.  The DUmmies may be cheering now, but not for long.  They need their CC's.

It will be kind of interesting to see how free market capitalism deals with this.   

[Texacon]

Did you know there's a rider in this bill allowing you to carry a loaded, concealed weapon onto National Park properties?
As for CC's, this is why it's a good idea to always position yourself not financially vulnerable to anyone except yourself.  You never know who's going to be elected and turn shit upside down.  The DUmmies may be cheering now, but not for long.  They need their CC's.

It will be kind of interesting to see how free market capitalism deals with this.   

That is the kind of stuff I hate.  If a bill can't stand on it's own then you should put crap like that in there to get it to pass.  This is the stuff that allows each side to point the finger at the other and say "Well HE voted for ..." or "SHE voted against ..."

KC

[JohnnyReb]

Did you know there's a rider in this bill allowing you to carry a loaded, concealed weapon onto National Park properties?
   

I think Bush did that by excutive order before leaving office....good to know that it is now made a law by congress.

...and when they DUmmies read that in the fine print....

[Hawkgirl]

I use my CC for gas and lately, for online purchases as I have developed a distaste for shopping malls....BUT....if they start charging me fees...well, I'm going back to basics and walk into the gas stations and go back to shopping with cash.

[Ptarmigan]

I pay my credit card bills on time. Why do I have to suffer????????????? 

[thundley4]

I pay my credit card bills on time. Why do I have to suffer????????????? 

It's the Demonrat way. Punish responsible people to the benefit of the irresponsible.

[AllosaursRus]

WTF???? This is Bovine Excrement!

Sooner or later we're going to get real tired of bailing these fools out of every situation they bring on themselves! I pray for that day!

[Peter3_1]

I cut my cards into little pieces 3 years ago. After 5 1/2 months in the hospital, the slimy companies had bucked all my interest to 31% annual. They refuse to do anything whatever to work it out, even reduce the interest in any amount. So I got payout numbers, paid them off, but STILL the asses called. In art least one case, I had overpaid and  they owed me $. STILL they refused to reduce the interest rate, so I called them and cancelled all the cards EXCEPT Amex.

Amex had suspended charging, but accepted my explanation and reinstated my card. There were a couple of giltches, but calling them got is fixed on the spot.   They apeared to "care" about the business relationship.

All the rest pretty much said they did not give a damn abiout me or the horse I rode in on, so why should I care about THEM? I don't, and my reccomendation is that you all put yourselves in a position where you can terminate them with a payoff and closing the account. Then, if they refuse to give you the interest of fee schedule you want, FIRE the bastards!

It won't take long before they are begging for your business, but EVERYONE needs to do this.

[rich_t]

I only have 2 CC accounts.  One personal and one joint with my wife.  Don't usually carry a balance on either.

So I guess I should say BOHICA and drive on.

[Chris_]

You have behaved responsibly, and done what you were supposed to. It is time for your punishment.
Ought to be the motto of the Obama Administration...

[Chris_]

I wish I had been dishonest enough to buy a ****ing house a couple of years ago...

[Celtic Rose]

I'm watching very carefully how this will turn out.  My current debt pay off plan has me paying off my car, and then my last credit card.  Depending on how this effects my card, the payoff order may get switched. 

My goal was to switch to a reward type credit card once all my debt was paid, and then pay that off so that I could get rewards without interest, but if they change their modus operandi, that may get binned, and I'll just use my check card when I need to pay anything. 

[DixieBelle]

Did you know there's a rider in this bill allowing you to carry a loaded, concealed weapon onto National Park properties?

As for CC's, this is why it's a good idea to always position yourself not financially vulnerable to anyone except yourself.  You never know who's going to be elected and turn shit upside down.  The DUmmies may be cheering now, but not for long.  They need their CC's.

It will be kind of interesting to see how free market capitalism deals with this.   

Amen!

Credit cards have become a right to some people when in fact credit is a luxury. Don't get me wrong, I have them and use them because they serve a purpose. But I don't care about rewards or points because I see that as a way to hook you and keep you beholden to the creditors. If I get goodies from using them, so be it. But it's not the end of the world.