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From: Sum Guy on 28 Oct 2009 21:02
I don't get it.

The banks *ARE* making money off people that carry no balance on their
credit cards. They make money because 1% to 5% of purchase transactions
are charged by the banks to the vendors at the time of sale. This is
insane.

Most premium credit cards tied to high-earning FF mile programs already
cost you $50 to $120 a year just to carry in your pocket.

============================

Got Perfect Credit? You Could Be Charged For It!

Bank Of America, Citigroup First To Try Out Idea, Which Will Undoubtedly
Alienate Many Who Follow The Rules

Oct 27, 2009

http://wcbstv.com/consumer/credit.card.fees.2.1272124.html

---------------

Loraine Mullen-Kress carries a Bank of America credit card and
religiously pays off her balance.

"Flawless credit," she boasted.

Yet now, her good credit habits could cost her. Earlier this month Bank
of America started notifying customers like Mullen-Kress that they will
be charged a new annual fee of $29 to $99.

"There is a big segment of their population that they will have never
made money on, which is people who pay their bills on time every month,"
said Ben Woolsey, Director of Consumer Research at CreditCards.com.

Bank of America said in a statement: "At this point we're testing the
fee on a very small number of accounts and haven't made any final
decisions." Citigroup is also trying out an annual fee with some card
holders, and analysts expect more banks to follow their lead.

The banks are starting to charge fees to reliable customers in response
to a slew of new credit card industry regulations that will limit when
banks can hike interest rates. Cardholders who get a new annual fee
notice in the mail will be in a no-win situation.

"They can either pay that fee or they can close the account, and if they
have had the account for a while and they close it, they are potentially
going to hurt their credit card score," said Woolsey.

Analysts say right now the banks are trying to figure out what their
customers will tolerate. Many say they'd cancel cards with a high new
annual fee.

"I think it is really bad. They're encouraging you to be a bad creditor
or not have good credit," one New Yorker told CBS 2 HD.

Said Mullen-Kress: "An annual fee would not be tolerated."

Credit card companies call the fees an experiment. Whether they stick
depends on whether customers are willing to pay for something that's
been free for so long.

If your credit card company does start charging you to carry its card,
call and complain. If you have a good credit score and you've been a
loyal customer, they may be willing to waive the fee to keep your
business.

You may also see annual fees go up on cards that offer rewards like
miles and hotel rooms. That's when you'll have to weigh whether the
rewards are truly worth the higher fee.
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