Bank of America and Citigroup want to lead the charge (no pun intended) on charging customers who pay off their balances each month and have perfect credit….because they just aren’t making any money off them. This is right up there with increasing taxes in hopes of making more revenue and finding that you just made tax revenue go through the basement. Obviously, there are no true economists that can add using real math instead of red crayon figures at any of these companies.
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
By ALEXIS CHRISTOFOROUS, CBS 2 HD News
NEW YORK (CBS) ―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. (emphasis mine)
Have ya coming and going there don’t they? Thanks to Barney Frank and the rest of congress that created this mess with their new credit card rules.
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 bed 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.