3 On Your Side: Credit Card Fees
The banking industry was hit with some of the most dramatic and sweeping reforms in history this year. Consumers are supposed to save millions from new rules limiting certain fees and interest rate increases. But as 3 On Your Side's Jim Donovan points out, banks are in the business to make money! So you need to pay attention.
Just when you thought it was safe to use your credit card again, experts say watch out! Ed Mierzwinski, of the U.S. Public Interest Research Group says,"Dealing with the credit card companies is like playing whack a mole and they're constantly looking for new tricks." While John Ulzheimer of Credit.com says, "Consumers are definitely not out of the woods with respect to banks charging them fees."
Karen Mallia got hit with a foreign transaction fee and she never left the country! She paid about 800 dollars to register for a conference in London. Her statement showed up with a fee of more than $25 dollars because a foreign bank was involved in the deal. Mallia says, "I think that's outrageous."
New reform rules have cut banks income and now industry insiders admit they're on the hunt for new revenue, from you! Nessa Feddis of the American Bankers Association says, "That income has to be made up someplace else. So what they're doing is experimenting with a new business model looking at interest rates, looking at different fees and experimenting."
Balance transfer fees, cash advance fees and annual fees are all on the rise. Got a reward card and miss a payment? You may lose your reward points and have to cough up the payment plus up to 100 dollars to reinstate those points. Some banks are now charging administration fees of up to fifty bucks to redeem awards even if you pay your bill on time. Also, watch out for paper statements, they could set you back up to nine dollars a month.
But when you get right down to it, Ulzheimer says "If a consumer does not like the way they're being treated they have got to take their money elsewhere."
New banking rules prohibit credit card companies from charging inactivity fees, but banks can close your account for inactivity or lower your credit limit. While banks have to now tell you up front about all fee increases and new fees, it's up to you to read about them in those little pamphlets you get in the mail.
