New Fees Abound With New Credit Card Rules

New Fees Abound With New Credit Card Rules

In the past, consumers could ask for and get a year-end itemization of purchases made on credit cards for free. That probably won’t be true in the future now that the Credit CARD Act is effective. Credit card issuers are busy adding new fees for almost any kind of activity on the credit card accounts you now hold and on new accounts.

For example, there will be a fee for getting a year-end charge listing and a fee for paper statements. There will be a fee for making an online payment and a fee for foreign currency exchange transactions made on purchases incurred when traveling outside the country. There will be fees to re-instate suspended reward points and fees to use points in some cases. There will also be fees charged for transferring account balances from one card to another. The kinds and types of account fees are expected to vary widely but all are designed to restore lender revenues lost as a result of limits put in place by the Credit CARD Act.

Consumer advocate groups are not pleased with the new fees. Some fees can be avoided through responsible behavior such as making a payment on time. But there are fees that cannot be avoided, like annual fees, as long as the account remains opened. Right now there are only about 20 percent of credit card accounts that have an annual fee but that number is sure to significantly rise.

Consumer advocates say that consumers can express their displeasure with these fees by limiting the number of credit cards they carry. Though closing an account can negatively impact credit scores, as long as the amount of your account balances is not more than 10 percent of the available credit, closing an account should cause little concern. It is more important to manage debt and limit use of credit cards for paying common essential expenses.

These new fees can only add to consumers’ debt problems. Credit card users can rack up fees quite easily that they are unable to manage. Many people who are in more credit card debt due to these fees are likely to need help to become debt free, a consolidation loan from Allied could help you become debt free – our partners can even slash up to 50% of your debt.

Some credit cards have fees that are refundable if certain conditions are met. For example, in the case of Citigroup, if you charge a set amount on the card over a twelve month period, you will get the fee refunded. It is like an interest free loan you make to the credit card company for twelve months.

What many consumers don’t realize is that on August 20 there are even more restrictions being placed on credit card companies. After that date, consumer will have the right to refuse new terms every six months, including higher interest rates, and to close the accounts while still paying off old charges under old terms.

Consumers should be careful when choosing credit cards and not be lured by up-front discounts and short-term low rate promises. Credit card companies must now present the real cost of using the card in readable terms. It is important to make sure you understand those terms before accepting the credit card. Once you agree to take the card then you must abide by the terms which can include high interest rates and plenty of fees.

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