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.