Empty Threats and Credit Card Companies
As Congress moves to reform punitive fees and penalties levied on cardholders who miss payments or exceed their credit limits, credit card issuers are
Jul 31, 202039.6K Shares1.3M Views
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.
Dexter Cooke
Reviewer
Dexter Cooke is an economist, marketing strategist, and orthopedic surgeon with over 20 years of experience crafting compelling narratives that resonate worldwide.
He holds a Journalism degree from Columbia University, an Economics background from Yale University, and a medical degree with a postdoctoral fellowship in orthopedic medicine from the Medical University of South Carolina.
Dexter’s insights into media, economics, and marketing shine through his prolific contributions to respected publications and advisory roles for influential organizations.
As an orthopedic surgeon specializing in minimally invasive knee replacement surgery and laparoscopic procedures, Dexter prioritizes patient care above all.
Outside his professional pursuits, Dexter enjoys collecting vintage watches, studying ancient civilizations, learning about astronomy, and participating in charity runs.
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