Watch Out for New Credit Card Fees
August 18, 2009 by Miranda Marquit
Filed under Finance
Yesterday, I wrote about how some credit card issuers are already complying with some aspects of the credit card bill of rights. (Some aspects go into effect on Thursday, the 20th, so credit card issuers have no choice about a couple things.) However, this isn’t all that card issuers are doing. They are also finding new ways to charge you money. Bargaineering reports on one of the ways that some issuers are trying to make a buck:
Just as many places reported, credit card companies are now turning to other “innovative” ways to drum up revenue – one of those silly unintended consequences. It turns out, some are now requiring that you make a minimum amount in purchases a year to avoid an annual fee.
It used to be that the annual fee was all but extinct. But now it appears to be making a new appearance. All you have to do in order to waive it is to make minimum purchases throughout the year. For those who are close to the max, and who are trying to pay down their debt, this not a helpful development. They may not have room on their cards to charge that much. Which means they are charged a fee. And if they do charge to avoid the fee, they risk slowing down their debt repayment plan.
Fees for inactivity
Another credit card fee that is starting to crop up is one charged for inactivity. Go for more than a couple of months without adding a purchase to your credit card, and you may find yourself hit with a $20 fee.
I wouldn’t be surprised if some bank found a way to cleverly name a fee that charges you if you actually pay off your account balance every month. Maybe they’ll call it a processing fee or something like that.
While the idea of charging a fee for paying off your balance each month is probably a little far-fetched, the fact remains that you are not in control of your financial destiny when credit cards have a hold on you that puts you in a position of greater weakness. If you avoid carrying a balance and take the rewards (which are shrinking), a credit card can be a good tool, but it might be progressing to the point where a credit card isn’t even that anymore.
It would be a good idea to pay off as much credit card debt as you can before that day arrives.
Image source: Daylife
I use credit cards just to get the cash rewards on purchases I would make regardless. If any of my cards start hitting me up with fees for inactivity or paying my balance in full each month I will cancel them immediately and go to cash and a debit card if necessary.
When will credit card companies stop? I mean really, how many ridiculous extra fees can they charge before everyone abandons using them. I switched to using a prepaid debit card and have NEVER had any more problems. You can’t spend more money than is on the card so that since of “buy now, pay later” associated with credit cards is gone. Also, there are no fees or payments to made. Great post!
Credit card companies will continue as long as it is profitable ;) And since many people like the buy now, pay later, I don’t foresee credit cards losing out altogether. After all, the convenience of being able to buy something you can’t technically afford is pretty hard to argue against.