Punished For Having Perfect/Good Credit.

[FidelisAdMortem]

I feel like I live in bizarro world after reading this article. Im staying away from these financial institutions.

http://wcbstv.com/consumer/credit.card.fees.2.1272124.html

[JediMindTrick]

Yet conservatives will still claim that big business can be trusted to do the right thing and that the government shouldn't regulate them.

[hillplus]

I get really angry about stories like this. Also when I see TV ads telling people they can half their credit card debt etc... So people who are irresponsible and selfish get a bailout but someone like me who does not buy things I cannot afford and don't need, has no debt and an 800 credit score gets nothing.

Bizarro world indeed.

[davetexas]

OP;
""There is a big segment of their population that they will have never made money on, which is people who pay their bills on time every month," said Ben Woolsey, Director of Consumer Research at CreditCards.com"


This is false. Businesses pay through the nose for the abillity to accept credit cards. Every customer using a card for purchases pays a fee (indirectly) to the credit card co.,while the merchant pays directly

[S.E.]

Another reason to pay off the cards and cut them up. I did that this year and feel great! Glad we did cause hubby is out of work.

[merickson]

I heard about this on a call in radio show. Apparently they are sending notices about a new annual fee to their best customer. The odd thing is that these notices set the fees at different levels, they are testing to find which price point is acceptable.

[GA_LP]

I find it interesting that all that are opposed to the new fees feel entitled to what amounts to an interest free loan. Really, $29 to $99 A YEAR is too much to pay for the convenience of using the bank's money to cover your purchases for up to 30 days?

[JenyEliza]

I haven't used a credit card in years. If I don't have the cash, I don't buy it.

Credit cards are a trap. They enslave you to the credit card company. You WORK TO PAY THEM. I'd rather WORK TO PAY ME.

Cut mine up and sent 'em back years ago. No more for me, thank you.

[Kegler300]

I already pay a fee on my Citicard for the air miles and awards program. If they raise that fee as suggested in the article, I will be closing my account and shredding the card.

[MrShotShot]

Yet conservatives will still claim that big business can be trusted to do the right thing and that the government shouldn't regulate them.

I don't think anyone says that "big business" can be "trusted" - if trust were a factor in business, we wouldn't need lawyers and contracts now would we?

What conservatives believe is that if businesses make poor decisions and don't take their customer base into account when they make decisions, those customers will go elsewhere. No one is forcing anyone to do business with BoA and Chase. If they make poor decisions, they will lose customers and either change their practices or go out of business. These customers can get credit anywhere.

No government regulations needed. That's what conservatives believe.

[badkarma]

Yet conservatives will still claim that big business can be trusted to do the right thing and that the government shouldn't regulate them.
I dont want to point out the obvious here, but these new fees are in direct response to government regulations.
The banks are starting to charge fees to reliable customers in response to a slew of new credit card industry regulations that will limit when banks can hike interest rates.

[Apatriot]

I feel like I live in bizarro world after reading this article. Im staying away from these financial institutions.

http://wcbstv.com/consumer/credit.card.fees.2.1272124.html


It's their right to charge more to make money. However, it's also our right not to do business with them. If the credit card companies aren't making money off of them, they have the right to change things so they do. On the other hand, if it's costing too much money to be worth using, consumers have a right not to do business with them. I don't see the big deal.

[Apatriot]

I find it interesting that all that are opposed to the new fees feel entitled to what amounts to an interest free loan. Really, $29 to $99 A YEAR is too much to pay for the convenience of using the bank's money to cover your purchases for up to 30 days?

You forget that the credit card companies charge the merchant 1-5% (depending on the size of the merchant) +$0.25 to$0.50 per transaction.

So, they are making money off of the loans from the merchant.

[jeepers]

I feel like I live in bizarro world after reading this article. Im staying away from these financial institutions.

http://wcbstv.com/consumer/credit.card.fees.2.1272124.html

This is very European. Check out their fees and interest rates. CRAZY to put up with it.

People should cut up their cards if their financial institutions do this to them.

[MrShotShot]

You're actually much better off sticking with a smaller, regional bank and getting one of their credit cards. You might not be able to upload a picture of your dog onto it or get air miles for purchases, but you'll probably be better off in the fee department. Plus you're more than likely not going to be talking to someone in Bangalore if you have to call to ask a question.

[Camp]

OP;
""There is a big segment of their population that they will have never made money on, which is people who pay their bills on time every month," said Ben Woolsey, Director of Consumer Research at CreditCards.com"


This is false. Businesses pay through the nose for the abillity to accept credit cards. Every customer using a card for purchases pays a fee (indirectly) to the credit card co.,while the merchant pays directly


YUP, If you are in the good credit category...Cut the card into itty bitty pieces and never look back if they dare charge a fee for the (laugh) service.

[birddog1]

I am going to have a good chuckle when those big companies run off their most fiscally responsible customers to other companies and are only left with the risker ones.

[stodr]

Yet conservatives will still claim that big business can be trusted to do the right thing and that the government shouldn't regulate them.

funny BOA said this is a trial ballon and see what people do with it. if it does not work they will probally stop. Sounds like capitalism to me.

[Snagglepuss]

I don't think anyone says that "big business" can be "trusted" - if trust were a factor in business, we wouldn't need lawyers and contracts now would we?

What conservatives believe is that if businesses make poor decisions and don't take their customer base into account when they make decisions, those customers will go elsewhere. No one is forcing anyone to do business with BoA and Chase. If they make poor decisions, they will lose customers and either change their practices or go out of business. These customers can get credit anywhere.

No government regulations needed. That's what conservatives believe.^This

[slick_trip]

so - this person uses BofA's money for a small amount of time - less than 30 days - and pays the balance off in full by the end of the month to avoid any interest.

BofA sees this and realizes it's costing them money to be a free 30-loan cycling month in and month out - so they up the annual fees for accounts that act like this.

basically saying - it will cost you to use our money - either through interest or higher annual fees.

consumer's choice - pay cash with each transaction.

in this example, as much as i hate to say it, i support the bank's decision.

[Camp]

so - this person uses BofA's money for a small amount of time - less than 30 days - and pays the balance off in full by the end of the month to avoid any interest.

BofA sees this and realizes it's costing them money to be a free 30-loan cycling month in and month out - so they up the annual fees for accounts that act like this.

basically saying - it will cost you to use our money - either through interest or higher annual fees.

consumer's choice - pay cash with each transaction.

in this example, as much as i hate to say it, i support the bank's decision.

If the card did not charge the business that accepts it you would have a point.

The charge is not free. They would never have started the practice if that were the case.

[badkarma]

so - this person uses BofA's money for a small amount of time - less than 30 days - and pays the balance off in full by the end of the month to avoid any interest.

BofA sees this and realizes it's costing them money to be a free 30-loan cycling month in and month out - so they up the annual fees for accounts that act like this.

basically saying - it will cost you to use our money - either through interest or higher annual fees.

consumer's choice - pay cash with each transaction.

in this example, as much as i hate to say it, i support the bank's decision.
I agree, except that canceling credit cards can be negative to your credit score. "pay us or we will screw up your credit rating" does not seem like something that we should encourage, or even allow, banks to do.

[slick_trip]

If the card did not charge the business that accepts it you would have a point.

The charge is not free. They would never have started the practice if that were the case.

i think it's fair to focus on what the consumer is getting - free money for 30 days. no doubt - credit is big business, but these are parallel points. the credit card company is in the credit business and business ain't free. the consumer wants to leverage free money - and there's no such thing.

$99/yr is far cheaper than 12%/month revolving for the convenience of not having to carry/pay with cash. either way, there's a charge for the convenience. or, pay cash.

now, should we go entirely paperless and the only way to transact is through 'credit', i'd change my position.

[slick_trip]

I agree, except that canceling credit cards can be negative to your credit score. "pay us or we will screw up your credit rating" does not seem like something that we should encourage, or even allow, banks to do.

that's a fair point. we are moving to a credit based society and maintaining a good score shouldn't be forced through payment.

also, as all this has become more efficient through computers and automation, i would expect the 'cost to do business' to go down, not up. clearly these institutions are exploiting this area to make gobs of cash in fees.

[drylok]

Yet conservatives will still claim that big business can be trusted to do the right thing and that the government shouldn't regulate them.

The difference is you don't have to do business with these companies. Compared to if the government is in charge they FORCE you to do what THEY say.

Open your eyes for the love of God! Why can't you see that?

Jesus Age Christ

[davetexas]

so - this person uses BofA's money for a small amount of time - less than 30 days - and pays the balance off in full by the end of the month to avoid any interest.

BofA sees this and realizes it's costing them money to be a free 30-loan cycling month in and month out - so they up the annual fees for accounts that act like this.

basically saying - it will cost you to use our money - either through interest or higher annual fees.

consumer's choice - pay cash with each transaction.

in this example, as much as i hate to say it, i support the bank's decision.


..............but they BOA, still recieve a cut of that persons purchases from the merchant.

(around 2 to 4 %. It has to be in the millions of dollars)

[Apatriot]

so - this person uses BofA's money for a small amount of time - less than 30 days - and pays the balance off in full by the end of the month to avoid any interest.

BofA sees this and realizes it's costing them money to be a free 30-loan cycling month in and month out - so they up the annual fees for accounts that act like this.

They are making money on transaction fees (1-5%). Admittedly, they aren't making as much money as transaction fees + interest.

basically saying - it will cost you to use our money - either through interest or higher annual fees.

consumer's choice - pay cash with each transaction.

in this example, as much as i hate to say it, i support the bank's decision.

I do too, however, I also support consumers going to different banks for the credit cards.