There is an interesting article in the New York Times this morning about the recent moves to control the exorbitant fees that credit card companies charge their customers. While this is probably the right thing to do it does have some ramifications for someone like me. I’m what’s termed a Deadbeat. I use my credit card but I ALWAYS pay the balance off at the end of the month to avoid interest charges. I have never paid interest on a credit card in all the years I’ve owned them. Needless to say, I’m not a credit card company’s favorite type of customer. They’d prefer that I pay the minimum due on my balance each month and it would be just fine with them if I was late making a payment once in awhile so that they can hit me with crazy fees.
Well, now that their ability to tax their favorite customers is coming under significant scrutiny, it appears that people like me are in the credit card company’s sights. A couple of the changes I might expect are reduced grace periods for purchases, or no grace period at all. I can tell you that if they start charging me interest from the date of purchase, I’ll cease using the card and stick to a debit card. Another potential change is for the credit card companies and banks to start charging annual fees. That’s another thing that I have always refused to pay and if they institute that, I’ll most likely cancel the card and explore other options.
Anyway, it looks like changes are in the works. When you receive any new mailings from your bank or credit card companies, I’d highly recommend you get out the magnifying glass and look over any term changes.
Most credit card issuers have already reduced their grace periods to 2 weeks, even for responsible borrowers. Lawmakers made a minimum 3 week grace period part of their proposed overhaul so i doubt grace periods will shrink any further.
I have a Capital One credit card that I am in the process of paying off. I haven’t charged anything new in over a year and pay double the minimum monthly. Yesterday I received a notice that they are raising my interest rate by 3% from 14% to 17%. I would really like to cancel the card and just pay off the remaining balance at the lower rate, but with unemployment looming and my emergency fund not at a level that will let me sleep at night, I won’t, and they know most people will just take it right now. Once I’m debt free and have my savings built up, I will tell them to take a hike.
I’m also a proud deadbeat. I logged onto my Chase a couple of days ago and noticed that no minimum was due. I also noticed that they had increased my credit line by $3,000 and changed the interest rate from 13.99 to 18.24. I emailed to ask why no minimum?? They said that because I was such a good customer, they would give me a break this month (ha). I emailed back, pointing out that was such a nice thing to do, especially since they increased my interest rate! They emailed back, saying they had “reviewed” my account in detail, and lowered the rate to 10.24. Chase, it doesn’t matter what interest rate you give me, I’ll still pay it off every month.
And there’s no way I’ll pay interest from the date I charge something, nor will I pay an annual fee. If that happens, debit card, here I come!
I use my credit card(s) for every purchase I make. Like you I have always paid on-time and have never paid interest/finance charges, annual fees, etc.
The bank makes a percentage off each transaction from the merchants so I hope that will continue to be enough for them. I refuse to pay a dime of interest or fees.
Great comment about getting out the magnifying glass….the print is so tiny & so onerous that I bet not even the lawyers read these when they sign up for a credit card unless they are working for a client!
Why do they even make such fine print text? It just seems like the wrong thing to do.. It’s obvious the only reason to do it is so that people hopefully won’t see it.