Tuesday, May 19, 2009

Brilliant strategy

Banks go after credit card holders who pay their bills on time:
Now Congress is moving to limit the penalties on riskier borrowers, who have become a prime source of billions of dollars in fee revenue for the industry. And to make up for lost income, the card companies are going after those people with sterling credit.

Banks are expected to look at reviving annual fees, curtailing cash-back and other rewards programs and charging interest immediately on a purchase instead of allowing a grace period of weeks, according to bank officials and trade groups.

“It will be a different business,” said Edward L. Yingling, the chief executive of the American Bankers Association, which has been lobbying Congress for more lenient legislation on behalf of the nation’s biggest banks. “Those that manage their credit well will in some degree subsidize those that have credit problems.”

As they thin their ranks of risky cardholders to deal with an economic downturn, major banks including American Express, Citigroup, Bank of America and a long list of others have already begun to raise interest rates, and some have set their sights on consumers who pay their bills on time. The legislation scheduled for a Senate vote on Tuesday does not cap interest rates, so banks can continue to lift them, albeit at a slower pace and with greater disclosure.
I am one of those who pay off every month. My immediate and gut reaction to this?

Cease buying stuff.

Way to go, Banksters!

6 comments:

Sorghum Crow said...

We are their worst customers. We pay on time!
Actually the over the last half year or so I have carried a balance to pay my tuition. I'm going back to school (yet again) but in the long runI should just dip into the savings and borrow from myself. I've re-invented myself so many times, I should apply for a patent.

ellroon said...

Banks hate you, Sorghum Crow, and are lurking in the bushes waiting for you to need money, trying to figure out how to hook fees onto your savings....

Tengrain said...

I only use credit because I don't want to carry around lot'sa cash. I pay everything off every month. My only debt is my mortgage, and I'm thinking about paying off that balance, too.

God, I hate bankers.

Regards,

Tengrain

mapaghimagsik said...

No balance here. Of course, I'm sure they'll come up with other fees eventually.

ellroon said...

The banksters appetites for huge gains have made them forget they are a service. Solid investments, cautious loans, careful bookkeeping... all forgotten because of greed.

They can squeeze the middle class for only so long before they either kill it or it gets really really angry....

ellroon said...

Right, map! Like fees for breathing...