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The Unintended Consequences of CARD

In May, I wrote about CARD, the Credit Card Accountability, Responsibility, and Disclosure Act of 2009. In that post I wrote about the potential unintended consequences of such legislation. Only five months later and we have it already. Latest bank fee is for paying off credit card on time every month, was just published by USA today, and confirms my cynical nature isn’t without reason.
It seems that to counter lost revenue elsewhere, card issuers are starting to add annual fees ranging from $29 to $99 for Bank of America customers as an example. The article goes on to share Citigroup’s plan to add fees to customers who don’t charge more than $2,400 per year.
This wasn’t unexpected, but it’s also avoidable. If you have a good credit rating and are hit with such a fee, call the card issuer and tell them you’ll cancel their card rather than pay the fee. If they refuse, tell them you plan to pay it off under the old terms, and won’t charge any more on it. It’s still easy enough to find cards that charge no fee, although it may get tougher over time. Remember, the issuers make money by merchant fees as well as the interest they change customers for carrying a balance month to month. So, if they alienate those who generate the merchant fees month after month they’ll only be spiting themselves.

Whatever the bank that issued your credit card, now is a good time to have a “plan B” whether that be a card by another issuer, the use of a debit card, or to take the Man vs Debt approach and tell the banks where to stick it.


  • Evan October 26, 2009, 9:33 am


    Just yet another example coming to light about a government completely ignoring unintended consequences. It wasn’t like MC or Visa was just going to take it on the chin when the gov’t started to attack their bottom line.

  • Bible Money Matters October 26, 2009, 9:43 am

    another reason why i save up and pay cash for everything, to avoid miscellaneous fees and overcharges by the credit card companies. If more people would just live to learn within a budget, and save up for the things they needed, and not carry a balance, we wouldn’t have to worry about any of this. *sigh.

  • MLR October 26, 2009, 9:04 pm

    I’ve never had a late payment because I set up automatic payments for the minimum. I also have an Outlook calendar alert for when the bill is due so I can pay the full amount.

    And now I’m getting penalized? Interesting, I’m sure SOME credit card will want my merchant fees. I dare my credit cards to test me on that 😉

  • Credit Card Chaser October 27, 2009, 11:03 pm

    Very true, what is also quite interesting is the uproar over Bank of America adding annual fees to many of their previously no annual fee cards and yet the BOA credit card division has been losing money for the past 5 quarters because of all of the defaults: http://www.creditcardchaser.com/boas-credit-card-business-is-losing-money-yet-still-catching-flak/

  • Smart Balance Transfers November 19, 2009, 5:18 pm

    The consequence keep getting worse. Lots of visitors to my blog are posting about Citi rates being raised to 29.99%. In my opinion, the banks are raising rates as high as possible before the new laws take effect. Then, they can lower rates if they choose, but it protects them when they can no longer raise rates. The new laws have really caused much more harm then good. We’ll all be paying higher interest rates to make up for the money banks will lose because of the bill.

  • Robyn - CCD January 10, 2010, 8:14 pm

    This wasn’t unexpected, but it’s also avoidable…

    I’m so glad you added these points. I know I am looking in from a very different political environment and economy here in Australia, but I am reading complaints about being penalized for being financially responsible. What seems to be forgotten is that if you are financially responsible you have so much more power – the power to choose and you are really the most unlikely category of consumers to be hit with the worst of the unintended consequences which is surely reduced/canceled credit lines and its possible credit rating implications

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