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Reply #84: Credit Card Industry Aims to Profit From Sterling Payers [View All]

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AnneD Donating Member (1000+ posts) Send PM | Profile | Ignore Tue May-19-09 02:44 PM
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84. Credit Card Industry Aims to Profit From Sterling Payers
Credit cards have long been a very good deal for people who pay their bills on time and in full. Even as card companies imposed punitive fees and penalties on those late with their payments, the best customers racked up cash-back rewards, frequent-flier miles and other perks in recent years.

Now Congress is moving to limit the penalties on riskier borrowers, who have become a prime source of billions of dollars in fee revenue for the industry. And to make up for lost income, the card companies are going after those people with sterling credit.

Banks are expected to look at reviving annual fees, curtailing cash-back and other rewards programs and charging interest immediately on a purchase instead of allowing a grace period of weeks, according to bank officials and trade groups.

It will be a different business, said Edward L. Yingling, the chief executive of the American Bankers Association, which has been lobbying Congress for more lenient legislation on behalf of the nations biggest banks. Those that manage their credit well will in some degree subsidize those that have credit problems.

As they thin their ranks of risky cardholders to deal with an economic downturn, major banks including American Express, Citigroup, Bank of America and a long list of others have already begun to raise interest rates, and some have set their sights on consumers who pay their bills on time. The legislation scheduled for a Senate vote on Tuesday does not cap interest rates, so banks can continue to lift them, albeit at a slower pace and with greater disclosure.

lots more.....

http://www.nytimes.com/2009/05/19/business/19credit.htm...


They are working to make themselves unattractive. I remember what it was like before credit cards. I have been without one for some time now and have done well. You really pay to use the card....and if they start charging interest from the minute you purchase an item-what is the benefit to you. I'd rather pay cash and be done with it.
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