Being A Good Credit Card Holder No Longer “Good”

As the economic crisis and unemployment rise continues, American consumers are becoming smarter consumers. Focusing more on savings than on consumption, consumers are now doing their best to keep an eye on their finances and avoid debts.

Nowhere is the migration from unchecked spending to conscientious saving more apparent than in the case of credit card holders. When the economic crisis hit, one of the hardest hit were credit card holders. Burdened by years of buying on credit, revolving their credit card debts and having little to no workable financial plan to get out of debt, credit card holders suddenly found themselves with debt that needed to be paid quick and that was growing more expensive everyday. Many found themselves financially in trouble. Some were able to recover, some are still recovering. As a result of this experience, credit card holders have learned the value of properly managed credit.

Ironically, in a time when credit card holders are finally becoming responsible and focusing on being “good” credit card holders, the credit card industry badly wants them not to be. San Jose State University assistant professor of finance Marco Pagani, PH.D. said, “Good consumers will be hit by fees”. It’s no surprise and these actions are a direct reaction to the crackdown of the feds on the ability of credit card companies to raise their interest rates, Pagani believes.

Recently, Bank of America announced that annual fees are making a comeback. Credit card holders, whether balance-carrying or balance-free, will get hit by annual fees. Thus, even if a card holder does his best and maintains a good credit card standing, he will still get penalized by annual fees. Bank of America isn’t the only credit card company doing this either.

Citigroup has also announced that it will be charging fees to credit card holders who charge less than $2,400 on their credit cards in a year. These “inactivity” fees are aimed at encouraging credit card holders to charge more on their credit cards. Clearly this new policy discourages credit card holders who lookout for their credit card debts and try to avoid unnecessary credit usage.

According to Pagani, “Since they have less flexibility on the rate they can charge you, they’re going to try new structures for fees and pricing”.

Maria Enomoto of Surepath Financial Solution also had this to say: “they are pushing you to spend the way they want you to spend”.