Posts Tagged ‘credit card fees’

Credit Card Companies Milking Consumers: The Number One Reason Why We Need Elizabeth Warren as Director of The Consumer Financial Protection Bureau

An article today in the Washington Post discussed how credit card companies are now charging customers with good credit, who manage their finances wisely by paying off their balances in full every month. Such customers are now finding that they’re having to pay an annual fee, where they didn’t before.

The reason for this is that credit card penalty fee income has been reduced by the new credit card regulations and the banks, not wanting to see sources of profit dry up, no matter how ill-gained those profits were, are now having to charge the only customers they have left: those with good credit who have traditionally never been a great source of profit. As Curtis Arnold, owner of CardRatings.com says “The only true deadbeat customer is someone who has a card and never uses it. Just having good credit alone in today’s market is not enough for that customer to be profitable."

The article goes on to say that this problem illustrates the “challenges” facing the credit card industry, as if the only choice credit card companies have in order to make money is to find new ways to screw people. Really? Why is interest income not enough? Why do they need fee income? They don’t…they’re just greedy, having been accustomed to years of being largely unregulated and able to do whatever they wanted without consequence.

Because the credit card industry and Wall Street in general is so corrupt and so greedy, we need a strong watchdog to lead the newly created Consumer Financial Protection Bureau. Harvard Law Professor Elizabeth Warren is the best qualified person for that job, and if the Obama Administration allows Timothy Geithner and his cronies to place another industry sycophant in that position, then you can be sure that the agency will do nothing more than rubber stamp whatever fee scheme the credit card companies come up with next.

If you don’t want to be charged exorbitant fees, then I suggest you write to President Obama and to your senators and tell them you want Elizabeth Warren to head the CFPB.

Pay A Buck For A Paper Statement? Watch Out For More “Creative Fees” From Banks

credit fees In December 2009, CreditCards.com reported that Alliance Data Systems, the credit card issuer for many large retailers, would begin charging $1 to those who elected to receive their billing statements in the mail as opposed to online.

Beyond the fact that this fee is frankly a junk fee, regardless of what the banks want to say about it,  as LaToya Irby notes on About.com, customers who elect to receive their statements online might miss the important warnings about the cost of their credit unless they also download their statements in PDF format.

Is this an attempt by the credit card companies to mute the impact of having to inform consumers of the true cost of credit? It might be. It  might also be a way to mute the impact of the new law on the banks’  income statements.  It is estimated that the new law will cost banks $50 billion in lost revenue.

You see, over the last thirty years the slow and steady erosion of regulation on financial institutions has made it possible for the financial services industry to grow into the behemoth that it is today.  It just became very profitable to keep people in debt.

The banks don’t want to give those profits up. What’s more, they’ve had plenty of notice from the Federal government about the effects of the new law….nine months to be precise. So, they’re going to do whatever it takes to ensure that they continue to rake in those big profits. While the new legislation does plug in some of the regulatory holes, it had made some new ones and you can be sure the banking industry knows exactly where they are.

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