Good Credit Card Holders No Longer Immune To Fees And Hikes
Understandably, when the economic crisis hit, credit card companies were hard hit. Credit card holders, finding themselves running out of cash, prioritized daily expenses and put aside debt payments resulting in massive credit card debt defaults and, ultimately, write offs. The problem was further exacerbated by the fact that credit card companies had overextended their business, offering credit to subprime borrowers and encouraging revolving debt in order to gain profits from the resulting fees and interests. Credit card companies were actually looking at the prospect of going bankrupt when they were saved by the government bailouts using taxpayer’s money. Ironically, the consumers who indirectly provided a bailout for credit card companies are the ones getting gouged by these same companies for them to gain profit.
While the predatory practices credit card companies are doing nowadays are worrying, they are not exactly new. In fact, the government passed the controversial Credit CARD Act to fight off exactly these types of practices. Many of the legislations included in the act would have provided protection for consumers from such practices had the act not been delayed for so long. Congress decided that the greater part of the Credit CARD Act would be activated next year, February 2010. This was to give credit card companies time to adjust to the new laws. The companies did, though not exactly how everyone thought they would.
Ever since the Credit CARD Act was passed, credit card companies have raised interest rates and fees, added new fees, cut off available credit and basically made it more expensive and difficult for consumers to carry credit cards. Now, it has come to a point that even credit card holders who have conscientiously kept their credit cards fee and interest free by staying current with their credit card payments are getting hit with fees. Basically, credit card companies are now punishing good credit card management among consumers.
Among the many measures credit card companies are taking that punish good credit card management is the return of annual fees and the introduction of fees for non-usage of credit cards. Some credit card companies have also introduced fees that will be charged to card holders if their monthly credit card usage falls below a certain threshold.
Credit card companies are hoping that, with these measures, they can see profits from credit card holders who use their cards intelligently. They may also be targeting credit card holders who maintain credit card in order to keep their credit scores high. It is common knowledge that credit scores are affected by the available credit of a consumer and the length of time that a card holder has had his or her credit card.
