When the United States Government passed new legislation regulating credit card companies in May, many lenders began searching for new ways to make up for foreseen lost profits and gain new revenue from both new customers and longstanding customers. One of these new ways is actually an old way that some banks are reinstituting. In the past 20 years most lenders have dropped the annual fee that they used to charge for the convenience of using one of their credit cards. The annual fee is now making a comeback as the credit card companies scramble to regain profits.
Among the large credit card providers, Bank of America has recently announced that they will be “test marketing†a new membership for some of their cardholding customers. The fee will range from $29 to $99 annually, and if it is accepted by the majority of the stated “small number†of customers it is sure to be assessed on all credit card accounts in the near future. For those in the test group, they will have the option of canceling the credit card, or continuing to use the credit card even though they will have to pay the annual fee. The membership fee will be added to the customer’s credit card bill and interest will be incurred along with any other debt balance. This is especially problematic for consumers already struggling to pay down a credit card debt.
The new credit card reform legislation was slated to go into effect in February 2010 but a new proposal is now in congress to move the effective date to December 2009. The legislation is designed to protect already debt troubled consumers, but if the banks and credit card companies see a cut to their profit margin in some areas they will find ways to profit in others.
Yedda: RE: Credit card dilemma…
Pete answered: re:Lita, My husband and I have 4 credit cards which we have pretty much run up to their limits of $4,000 for two of them and $2,500 for the other two. We never intended to get so in debt with them because we had learned our lesson wit…