Banks new credit card tricks
The Wall Street Journal reports this morning on new tricks that banks are coming up with to try and regain lost income due to fees and other tactics limited by the Credit Card Reform Act of 2009. While they don’t attribute many of the tricks discussed to particular banks, they do call out JP Morgan Chase in particular as being among those aggressively implementing these new fee income schemes.
Among the tricks to watch out for:
- Increase in or addition of annual fees
- Marketing “professional” (instead of consumer) cards. These cards are marketed to individuals but act like corporate cards, and aren’t regulated the same as consumer cards under the Credit Card Act.
- Charging a late fee when a payment is due on a Sunday but not received until the following Monday, by claiming that they DO accept payments on Sundays even though there is no mail delivery.
- Charging high finance charges but then offering a large discount off of them via a rebate card. The rebate card can be revoked at any time, effectively increasing the finance charge, and this isn’t regulated by the Credit Card Act.
- Shortening the billing cycle to below 21 days, despite the fact that the Credit Card Act specifically says this is illegal.
- Increasing balance transfer charges, or instance from 2% to 5%.
- Raising minimum finance charges, for instance from 50 cents to $1.50. This is what you would pay at a minimum even if you paid off your bill in full.
- Charging up-front activation fees when you sign up for a card. On low credit limit cards, such as those marketed to college students, these activation fees along with the annual fee, can take up most of the initial limit of the card, forcing customers over their credit limit (which then costs a fee) unknowingly when they spend a small amount.
- Increasing foreign transaction fees, say from 2% to 3%, and being more aggressive on what they apply to. Say for instance you purchase something from a company in Canada and the transaction is in dollars. That might now be subject to a foreign transaction fee.
The article suggests the following ways to fight back
- Always pay your bill on time. Personally, I pay mine whenever I get the statement.
- Dispute fees directly with the issuer whenever there is a fee you think is unreasonable or notice anything that looks wrong in your statement. Raise hell.
- Keep calling them until you get satisfaction.
Fees & charges | admin July 31, 2010
