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Gerry Clinchy
02-23-2010, 09:44 AM
http://rismedia.com/2010-02-22/as-credit-card-changes-roll-out-watch-for-attempts-to-raise-fees/



As card issuers prepared for the new rules in recent months, many have raised interest rates on customers—to the dismay of consumer advocates. At the same time, the weak economy and fears of rising defaults caused card companies to cancel accounts and lower credit limits on anyone who appeared risky.


A different twist on redistribution of wealth:

Consumers who are good managers of credit, though, might be unhappy to find that card issuers may be passing on higher interest rates and fees to them.

The anticipated results of these new credit card rules:
1. Higher interest rates for all cardholders

Because card issuers can’t quickly raise rates or change terms on their riskiest customers, they will charge higher interest rates across the board to protect against potential losses

2. An Inactivity Fee:

He says one of the most anticipated: the inactivity fee. Card companies say it costs them money to maintain accounts, and they are starting to slap a fee on unprofitable customers who rarely use their cards.
I think that a lot of responsible credit-users will therefore close out cards that they don't use very often. Better check those "change of terms" letters I just got on cards I don't use.

3. An annual fee for having the card

But card issuers are eyeing a revival. Synovate reports that 35% of card offers in the fourth quarter carried an annual fee, the largest percentage in a decade. A year earlier, 23% had annual fees.
Another reason to dump those cards I might only use once a year.

4. Skimpier "rewards". My Discover card already raised the $ amount when I can cash in the cash-back reward.

. But issuers will be launching richer reward programs to compete for the most profitable customers: good credit risks who carry a balance, pay interest and occasionally trigger fees.

Leddyman
02-23-2010, 10:57 AM
This has cause my wife and me to decide that we won't be using the cards much anymore.

We are on an accelerated plan to pay them off and we aren't using them anymore. We will keep one or at most two for extreme emergencies. Maybe make one monthly charge and then pay in full to avoid any inactivity fees.

New policy at my house...no cash, no play.

Uncle Bill
02-23-2010, 11:18 AM
I use my Cabela's Visa card to the tune of a couple grand a month. I don't know if they have an annual fee OR what their interest rates are. I've never paid any interest fees, since I pay the balance due every month.

The Visa folks are getting their percentage on each transaction...last I heard it was 5%. So if a $100/month on my payments isn't enough, I'll cancel.

For me, the card is a great convenience. Plus, I get credit $$$ for merchandise at Cabela's, which doesn't go to waste.

When I'm required to pay too much for that convenience, it will get returned.... in small pieces.

UB

Franco
02-23-2010, 12:07 PM
Watch your new interest rates which go into effect next month.
Watch for annual fees, even if your card didn't have them in the past.
Watch for fees for none use of your card.

If you don't like the new terms with your current card, shop for better terms with other providers and transfer the balance.

Buzz
02-23-2010, 08:50 PM
Be sure to hang on to your current accounts until making any purchases that require financing, before transferring balances and closing accounts.

dnf777
02-23-2010, 09:48 PM
Watch your new interest rates which go into effect next month.
Watch for annual fees, even if your card didn't have them in the past.
Watch for fees for none use of your card.

If you don't like the new terms with your current card, shop for better terms with other providers and transfer the balance.

I welcome those threats. If enacted, I believe most *responsible* cc holders will simply mail their cards back to the banks in tiny, shredded pieces, leaving them to deal with the rest of folks who may not pay their balances. If they take away my frequent flyer miles and other perks, they can have their cards, and I'll go back to writing checks and borrowing only from myself for things like cars. Hobbies, toys, etc...should not be financed via credit cards anyway.

Sabireley
02-24-2010, 05:17 AM
I welcome those threats. If enacted, I believe most *responsible* cc holders will simply mail their cards back to the banks in tiny, shredded pieces, leaving them to deal with the rest of folks who may not pay their balances. If they take away my frequent flyer miles and other perks, they can have their cards, and I'll go back to writing checks and borrowing only from myself for things like cars. Hobbies, toys, etc...should not be financed via credit cards anyway.

I am not sure what affect cancelling your cards has on your credit rating. A good credit rating gets you lower interest rates on mortgages and lines of credit. Cancelling cards makes you less desirable than someone with several cards carrying balances, but paying on time.

ducknwork
02-24-2010, 06:44 AM
We paid off our credit cards and won't be using them anymore, but I don't want to close them. Part of your credit score is figure by your debt to available credit ratio. Right now, on 2 cards, I have 0 debt and over 20K available. Closing them will surely drop my score a little. However, if they start costing me money just to have it in my wallet, I will cancel them in a heartbeat.

Buzz
02-24-2010, 07:43 AM
I am not sure what affect cancelling your cards has on your credit rating. A good credit rating gets you lower interest rates on mortgages and lines of credit. Cancelling cards makes you less desirable than someone with several cards carrying balances, but paying on time.

That's why I made the comment that I did above. Maybe I should have explained myself. You especially don't want to cancel cards that you've carried for a long time just before going out to get a car loan for example.

luvmylabs23139
02-24-2010, 08:18 AM
One of our credit cards, we don't carry balances, was going to start charging an annual fee.
We called them and told them we would cancel if they charged us a fee. They put us on hold for a couple of minutes and then came back and said " no need to cancel, we are waiving the fee."

DSemple
02-24-2010, 09:05 AM
Got screwed by Citibank about 15 years ago. Closed out all the cards and havn't borrowed a dime since. One of the best financial decisions I ever made. Dirty rotten scum bags.

Buzz
02-24-2010, 09:11 AM
Got screwed by Citibank about 15 years ago. Closed out all the cards and havn't borrowed a dime since. One of the best financial decisions I ever made. Dirty rotten scum bags.

In the Sunday Sioux Falls Argus Leader there was a big write-up about how these reform measures could effect employment in the area. I was wondering who would want a job screwing people over? If you need to charge the vendors up to 5% of the sale, charge your customers loan shark interest rates and fees, there must be something wrong with your business model.