Card Issuers Invent New Fees To Skirt Federal Laws

[theHandpuppet]

http://news.cincinnati.com/article/20100221/BIZ01/2210413/Card+issuers+invent+fees
Card issuers invent fees
By David Holthaus • [e-mail] • February 21, 2010

The new federal law on credit cards kicks in Monday, and it contains some better protections for credit card users. But some banks have already figured out new ways to charge fees not covered by the Credit CARD Act.

One of the latest is an "inactivity fee" now being charged by banks including Fifth Third. The region's largest bank, for instance, will charge you $19 if you don't use your bank credit card within 12 months.

"The fee helps us cover the increasing cost of servicing credit card accounts," Fifth Third spokeswoman Stephanie Honan said.

Other banks are looking for new sources of fees as well. Beginning April 1, Citigroup will assess cardholders a $60 annual fee if they charge less than $2,400 a year. "This action is necessary given the increasing costs of doing business," Citi spokesman Robert Julavits said.... MORE

[Toucano]

1. Couldn´t one ask

What is the "...increasing cost of servicing credit card accounts..." when the account is inactive?

The data sits in a database. It doesn´t get manipulated for 12 months.

Oh, the costs that must incur!

[MadHound]

2. There is no way to bring the CC corporations under control except for one, cut up your cards

Hit them in the place where they will respond, their bottom line. Reforms, especially those passed through a corporately controlled government, are meaningless. They are too weak and the CC corporations, after successfully lobbying for loopholes, simply drive their trucks right through those loopholes and continue to apply the screws to their customers.

If you cut up your cards you will be sending a powerful message that you reject these corporations, and if enough people do so CC corporations will either be forced to reform or simply go under.

Stop playing the credit card game. Your life will be all the much better because of it.

[dysfunctional press]

5. or you could just pay off the balance on time every month instead.

instead of cutting up the cards, just learn to use them effectively.

[MadHound]

6. Until they start charging fees for doing that.

Besides, even if you pay off your card every month, the credit cards are still making money off of your purchases, since they charge businesses for every purchase that is made with a card, including yours.

Starve the beast, cut up your cards.

[lunatica]

9. Well millions are doing that now as they lose their homes

And the banks seem to be reacting by abusing the customers they have left. The banks are forcing their own starvation. I'm sure they're feeling the hunger pangs now. Thus the gluttony.

[dysfunctional press]

11. that's when you close that account, and open up one that doesn't.

as long as there are credit cards, i'll have a couple.
the convenience can't be beat.

try renting a car without one.

[MadHound]

12. Open up one that doesn't what?

Charge you for paying off your balance? That might work for awhile. But all CC corporations do charge businesses for taking CC payments, it's one of many ways they make money.

I've lived my whole life without a card, and I haven't suffered from inconvenience. Cash is accepted everywhere, as are checks. And gee, with debit cards you can swipe just like a credit card. Oh, and I have no trouble renting cars, or anything else.

But hey, just keep on feeding the beast. Just don't complain when they take a bite out of you.

[dsc]

13. they charge businesses for debit cards too

so I don't see how that helps to starve the beast.

[MadHound]

14. Intersting, then simply go to a cash/check only basis then.

I didn't know that, but I've not been one to use my debit card(which doubles as my ATM card). I have a problem with my purchases going into all those corporate databases, so I think I've used my debit card maybe once.

However it is hard to charge all sorts of exorbitant fees on debit cards. Can't charge interest, most don't charge a user fee (that I know of). So I would say that they're a bit better than credit cards.

[dysfunctional press]

16. if it works for you, that's great. personally, i prefer to use credit/debit cards....

and will continue to do so, with absolutely no compunction.

[MadHound]

18. Cool, continue to be part of the problem then

Where those chains with pride. Just don't complain when the CC corporations bite you in the ass, and trust me, they will.

[dysfunctional press]

21. i'm not wearing any chains.

i just know how to best manage my money/finances for myself and my wife.

[Gormy Cuss]

22. You can do that with a debit card.

If very few people had credit cards, the car rental companies would lose too much business by insisting on a credit card for the rental. That's the way it worked before credit cards were handed out like library cards.

[dysfunctional press]

23. a lot of debit cards can be used like credit cards- ours has a visa logo on it.

and merchants are charged fees for their use, just like with credit cards.

[dixiegrrrrl]

24. Paying off the balance does not get around the 60.00 fee

unless you charge the huge amount that Citi wants.
We always pay off our balances.
but we do not spend anywhere near 2500 a year on the card.
So, goodbye Citi, soon as that notice arrives.

[dysfunctional press]

25. i don't have any citi bank credit cards.

i got rid of my home depot card when i realized that it was theirs.

[Skink]

3. Won't have to worry about that one.

[hatesthegop]

4. I say Nationalize all the banks

and put all the CEO's in a reeducation camp!!!

[lunatica]

7. What is that famous 'increasing costs of doing business' crap

Really. I imagine finding new ways of charging for nothing must be the increasing cost they're talking about. They've already outsourced everything else and actually cut costs, so what the fuck are they talking about?

[MadHound]

8. They've got to pay all those lawyers who are busy finding loopholes for them

Billed hours aren't cheap.

[lunatica]

10. The debt collecting agencies must be doing great business now

Maybe that's their 'increasing costs'.

[Stephanie]

15. In fact they are.

They are a major factor in lobbying against consumer protection efforts. Cuts into their business.

[nc4bo]

17. What a bunch of slimey maggots.

They know exactly how to get around any law or regulation put into effect.

[ProdigalJunkMail]

19. i don't think they are 'skirting' the rules so much as

having to be more obvious about what their desired revenue streams are. most people have always accepted the fees/fines because they were, to some degree, hidden away until such time as it was too late to easily solve the problem.

now, the banks are just ramping up the fees that they CAN ramp up to maintain their revenue. now, thank goodness, it has to be more out in the open and up front so the consumer is informed. i hope this leads hordes of people to change the way they use credit...and from whom they obtain that credit...

sP

[ThomThom]

20. This type of behavior on the part of banks will only make things

worse for them. More people will move to credit unions. B of A gave us a credit card along with our debt card when we opened an account years ago. We have never used it, didn't want it, don't need it and now they are going to charge us for it. I have been slow in moving to the credit union but this will surely light a fire under me. Can you say BYE BYE? bye bye

[bvar22]

26. Anyone who supports the HCR Bill....

...because it is going to regulate Health Insurance need to look at this example of how effective those regulations are going to be.