Banks find more ways to stick their hands in consumers’ pockets
Monday, November 8, 2010
The Credit Card Accountability Responsibility and Disclosure Act of 2009 was enacted to protect consumers from the rapacious behaviors of banks out to maximize their income from various fees charged to account holders and cardholders. Now, according to Wall Street Journal reporter Jessica Silver-Greenberg, banks have come up with new ways to squeeze fees out of consumers while staying within the law.
Some are raising minimum payments on certain customers’ accounts in order to increase late penalties. Others are ramping up credit-protection insurance programs and charging customers for coverage without permission. Still others are pushing aggressively into high-fee prepaid cards, which are exempt from most of the new rules.
Banks already have rolled out a slew of new fees since the passage of the Credit Card Accountability Responsibility and Disclosure Act of 2009. Among other things, they have revived annual fees; shortened billing cycles; levied new charges on cards with low credit limits; increased balance-transfer, cash-advance and foreign-exchange fees; and begun aggressively marketing “professional cards” not subject to the restrictions of the Card Act.
Silver-Greenberg’s excellent report should be read in its entirety. And be sure to follow this advice she offers:
Before signing up for a new card offer, borrowers should find out whether services like payment protection are automatically included. And once borrowers start using a card, they should pore over their statements each month in search of billing changes. If they notice a higher minimum payment or a new fee, they should contact the card issuer immediately, say consumer advocates.