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| Tuesday, July 31, 2007 |
| Credit card industry resists change as fees shock many |
USAToday's article: Credit card industry resists change as fees shock many reports that the Federal Reserve Board and Congress are working on getting better disclosures and restraining some of the credit card industries most critized policies. Steve Gutierrez of Houston says he was recently hit by a $29 late payment after he paid online 31 minutes after a 3 p.m. deadline. Because his late payment also caused his account to exceed his credit limit, he was socked with a $29 over-the-limit fee. His 31-minutes-late payment cost him nearly $60.
"I've made mistakes, and I've overlooked the fee," Gutierrez says. "But with the over-the-limit fee, it's getting steep." As a customer since 2001, he expected his bank to waive at least one of the two fees. But it said no. He canceled the card.
Carol Khalikyar of Roswell, Ga., was irritated this year when her card's interest rate jumped from 21% to 27.5%, for no apparent reason. She called her bank, which refused to lower it. "They shouldn't be able to do things simply because they can," Khalikyar says. I am not a fan of expensive fees or high interest rates, but I did enjoy the credit card industries response to all of these proposed restrictions - "The costs people are concerned about, whether it's higher interest rates or fees for late payments, are within the control of the consumer," says Clayton of the bankers association. "They can avoid these fees and avoid interest rate increases. One of the challenges we have is getting across to people that this is a loan. If you pay it back, it doesn't cost you a cent." That is pretty much how I avoid fees or high interest rates - I use credit cards, but I pay them off every month. |
| posted by Boston Gal @ 9:23 AM *
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| 4 Comments: |
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A couple of months ago, I called to do a payment over the phone on the day it was due - that day's date had slipped my mind. They wanted a fee for the phone payment and a late fee because the payment wouldn't go into their system until the next day.
After seeing my excellent unblemished payment history with them, the person on the phone waived the phone payment fee. But I was still charged the late fee. I guess that was technically fair. I have, on average, a 28 day grace period within which to make payments. But it just seems with today's technology that you shouldn't get penalized for making a payment on the day the payment is due.
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I have been lucky enough to be able to pay my credit card in full each month, but the credit card industry is banking on the fact that a number of people won't be able to do so - and I think that that is unfair. I understand that the credit card companies need to make money, but I also think there should be (more? better?) regulation of the industry...
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I think I know which credit card company Steve Gutierrez was referring to in the article - in fact, I used to work for them (Starts with a 'C', ends with a number). It made me sick to have to tell people that they had a late payment charge because they paid just minutes after the deadline. I tried to waive fees as much as I could.
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I try to pay my credit cards off every month, so I don't get charged for the luxury. However, I did run into a little bit of a problem with them recently (I've since paid them off), and I'm considering cutting them up.
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A couple of months ago, I called to do a payment over the phone on the day it was due - that day's date had slipped my mind. They wanted a fee for the phone payment and a late fee because the payment wouldn't go into their system until the next day.
After seeing my excellent unblemished payment history with them, the person on the phone waived the phone payment fee. But I was still charged the late fee. I guess that was technically fair. I have, on average, a 28 day grace period within which to make payments. But it just seems with today's technology that you shouldn't get penalized for making a payment on the day the payment is due.