rssEmpty Threats and Credit Card Companies
Tuesday, May 19, 2009 at 10:13 am
- 20 Comments
As Congress moves to reform punitive fees and penalties levied on cardholders who miss payments or exceed their credit limits, credit card issuers are threatening to charge new fees for customers who don’t carry balances each month and pay their bills on time, The New York Times reports.
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.”
I don’t believe this for a minute.
Those who manage their credit well aren’t going to put up with subsidizing anyone. They’ll do what people with sterling credit always do — cancel the card from the issuer trying to charge them, and shop around for something better. And if they don’t find it, they’ll pay in cash, or use a debit card. Delinquent borrowers rarely had this option, which is why they found themselves caught in a debt trap, paying high fees and rates, while issuers reaped profits from them.
This new threat sounds like a scare tactic, to counter the populist anger against credit card companies. But all it’s really going to do irritate a whole new class of credit card customers, who aren’t likely to sit back and take it as the credit industry looks to them for new ways to make money.
20 Comments
Comment posted May 19, 2009 @ 8:12 am
Amen! I spend thousands each month, yielding a handsome profit for my carrier, who charges the merchants a fee.
They are NOT going to have it both ways. If they attempt to charge me an annual fee, revoke or modify my terms, or cancel my cash-back, I WILL leave the company.
If no other is available with reasonable terms, I will not carry or use a credit card.
I WILL NOT SUBSIDIZE OR CARRY DEAD WEIGHT!
Comment posted May 19, 2009 @ 8:19 am
the first thing this congress should do if it had the guts? is to kick to the curb all the cheap H-1B robots being pimped by the likes of Tata and Infosys that are working in these garbage TARP WELFARE corporations data centers..
Pingback posted May 19, 2009 @ 11:06 am
[...] the rest here: The Washington Independent » Empt… Share and [...]
Pingback posted May 19, 2009 @ 11:12 am
[...] View original post here: The Washington Independent » Empty Threats and Credit Card Companies [...]
Pingback posted May 19, 2009 @ 11:21 am
[...] The rest is here: The Washington Independent » Empty Threats and Credit Card Companies [...]
Pingback posted May 19, 2009 @ 11:45 am
[...] The Washington Independent » Empty Threats and Credit Card CompaniesAs Congress moves to reform punitive fees and penalties levied on cardholders who miss payments or exceed their credit limits, credit card issuers are threatening to charge new fees for customers who don’t carry balances each month and … read more… [...]
Comment posted May 19, 2009 @ 11:49 am
Credit card companies aren't the bad guys. Government is the bad guy for manipulative “equal access” to credit laws. And we should blame deadbeats who live off credit cards. Don't use credit if you can't pay it back. Some people never learn that lesson.
It's easy to villify credit card companies but it's wrong. Any of the Democrats behind Obama on this one are welcome to start lending their own personal money to deadbeats who won't pay it back. Let's see how long that lasts.
Pingback posted May 19, 2009 @ 12:54 pm
[...] As Congress moves to reform punitive fees and penalties levied on cardholders who miss payments or exceed their credit limits, credit card issuers are threatening to charge new fees for customers who don’t carry balances each month and pay their … Go to Source [...]
Pingback posted May 19, 2009 @ 12:57 pm
[...] Go to Source [...]
Pingback posted May 19, 2009 @ 3:14 pm
[...] Empty Threats and Credit Card Companies – The Washington Independent.comAs Congress moves to reform punitive fees and penalties levied on cardholders who miss payments or exceed their credit limits, credit card issuers are threatening to charge new fees for customers who don’t carry balances each month and pay their [...]
Pingback posted May 19, 2009 @ 3:57 pm
[...] See original here: The Washington Independent » Empty Threats and Credit Card Companies [...]
Pingback posted May 19, 2009 @ 7:24 pm
[...] Empty Threats and Credit Card Companies – The Washington Independent.comAs Congress moves to reform punitive fees and penalties levied on cardholders who miss payments or exceed their credit limits, credit card issuers are threatening to charge new fees for customers who don’t carry balances each month and pay their [...]
Comment posted May 19, 2009 @ 6:25 pm
Those that manage their credit well will in some degree subsidize those that have credit problems
I don't understand why this guy would say this. Right now, just the opposite situation exists. Those who carry balances, exceed their limit or pay late are subsidizing those who pay their balance each month yet reap airline miles, free hotel rooms or whatever.
Those who pay off their balance each month are getting interest free loans while those who carry balances are paying 24% interest and paying $39 late fees for being one day late. That's their problem, but don't make it sound as if they are being subsidized by those who never pay a dime in interest.
His statement doesn't make any sense.
Comment posted May 19, 2009 @ 9:39 pm
Those who manage their credit well will wind up subsidizing deadbeats because they'll lose their rewards programs, which garner $500-$600 for every $50,000 charged if the balance is always paid on time. That's a cost to creditworthy customers whether you're willing to admit it or not. It's not a scare tactic; it's simply true.
Comment posted May 20, 2009 @ 1:25 am
Those that manage their credit well will in some degree subsidize those that have credit problems
I don't understand why this guy would say this. Right now, just the opposite situation exists. Those who carry balances, exceed their limit or pay late are subsidizing those who pay their balance each month yet reap airline miles, free hotel rooms or whatever.
Those who pay off their balance each month are getting interest free loans while those who carry balances are paying 24% interest and paying $39 late fees for being one day late. That's their problem, but don't make it sound as if they are being subsidized by those who never pay a dime in interest.
His statement doesn't make any sense.
Comment posted May 20, 2009 @ 4:39 am
Those who manage their credit well will wind up subsidizing deadbeats because they'll lose their rewards programs, which garner $500-$600 for every $50,000 charged if the balance is always paid on time. That's a cost to creditworthy customers whether you're willing to admit it or not. It's not a scare tactic; it's simply true.
Pingback posted May 23, 2009 @ 11:10 pm
[...] Empty Threats and Credit Card Companies – The Washington Independent.comAs Congress moves to reform punitive fees and penalties levied on cardholders who miss payments or exceed their credit limits, credit card issuers are threatening to charge new fees for customers who don’t carry balances each month and pay their [...]
Pingback posted May 24, 2009 @ 1:36 pm
[...] Empty Threats and Credit Card Companies – The Washington Independent.comAs Congress moves to reform punitive fees and penalties levied on cardholders who miss payments or exceed their credit limits, credit card issuers are threatening to charge new fees for customers who don’t carry balances each month and pay their [...]
Pingback posted May 25, 2009 @ 11:54 am
[...] Empty Threats and Credit Card Companies – The Washington Independent.comAs Congress moves to reform punitive fees and penalties levied on cardholders who miss payments or exceed their credit limits, credit card issuers are threatening to charge new fees for customers who don’t carry balances each month and pay their [...]
Pingback posted May 25, 2009 @ 6:10 pm
[...] Empty Threats and Credit Card Companies – The Washington Independent.comAs Congress moves to reform punitive fees and penalties levied on cardholders who miss payments or exceed their credit limits, credit card issuers are threatening to charge new fees for customers who don’t carry balances each month and pay their [...]
RSS feed for comments on this post.
Sorry, the comment form is closed at this time.
