Credit card fee frenzy

Posted by Rie Umano

Currently, credit card issuers are raising rates and penalty fees each year.
It is due to the economic downturn cycle. As the economy worsens and job losses increase, more people cannot pay their credit card bills. Then, credit card issuers are trying to limit only people who can at least afford and pay back their bills.
This punishment is not only for people who pay late or not all. Even people who never failed to pay back need to face with the raising rates and penalty fees. Banks in the U.S. will rake in almost $22 billions in penalty fees and average interest rate on credit card will reach to 14% this year according to R.K. Hammer.
This whole economic cycle brings our bad economy even worse. Even though many banks are out of money, they are raising rates and fees and many consumers are not eligible for the credit service. In addition, credit card companies are also trying to make harder for customers to pay on time by shortening grace periods.
Many banks say that they need money to offset record credit card delinquency rates, but if they continue kicking many customers out, there is no way to raise revenue.

Sources:
http://www.bankrate.com/brm/news/cc/20010514a.asp

http://moneyfeatures.blogs.money.cnn.com/2009/04/13/credit-card-fee-frenzy/

http://www.credit-card-comparison-online.co.uk/news/increased-interest-rates-since-penalties-capped.html