Thanks a lot Congress
When they aren’t spreading the wealth, they’re spreading the misery (emphasis mine).
Earlier this month Bank of America started notifying customers [with excellent credit] that they will be charged a new annual fee of $29 to $99.
“There is a big segment of their population that they will have never made money on, which is people who pay their bills on time every month,” said Ben Woolsey, Director of Consumer Research at CreditCards.com.
Bank of America said in a statement: “At this point we’re testing the fee on a very small number of accounts and haven’t made any final decisions.” Citigroup is also trying out an annual fee with some card holders, and analysts expect more banks to follow their lead.
The banks are starting to charge fees to reliable customers in response to a slew of new credit card industry regulations that will limit when banks can hike interest rates. Cardholders who get a new annual fee notice in the mail will be in a no-win situation.
The busy bodies in D.C. didn’t like that credit card companies charged risky customers higher rates and fees so they changed what was allowable. The banks still have to make money, though. They are businesses after all. With their hands forced, the banks are now looking to punish the good since Congress will not let them punish the bad.
Nice post… I agree completely. The companies MUST make a profit to survive, and Congress’ mandates limit their ability to do that. Things would be much better if Congress would butt out… LESS regulation, not more.
Sounds like the free market operating, if one way is not profitable, find another.
They know for all the kvetching, some will switch to profitable debit cards, others to another more profitable credit card, some will keep what they have and only a few will go to cash only which still makes them money (think EFT deposits, teller fees, etc).
Of course. Sheesh.