The Latest Dirty Credit Card Tricks, Part II
We hate to tell you this, but credit card companies don't love you… they love your money, and they use all kinds of dirty credit card tricks to get it
Dirty credit card tricks should be thing of the past, given the reforms recently passed under the Credit CARD Act of 2009... and perhaps in an ideal world elsewhere in the spacetime continuum, they are. But this is the real world, and while the old abuses have been curbed, we now have new ones to deal with.
One Fee After Another
In Part 1 of this article on Dirty Credit Card Tricks, I introduced you to the insidious foreign transaction fee, which has become almost universal. If you don't travel abroad, this may not be a big deal to you... but rest assured, the folks who issued your credit card still have you in their sights. And everything they're doing is legal, too -- for the moment.
Just as they promised they would if the proposed credit card reforms went into effect, credit card companies have raised their rates, increased their basic fees, and made less credit available. They're determined to keep their bottom line padded, so annual fees alone have risen by an average of 18%.
Meanwhile, cash advance and balance transfer charges are a third higher, and the aforementioned foreign transaction fee has increased by 50%. Plus, they've instituted some pretty creative ways to charge you new fees... including fees for not buying enough.
How's That Again?
For a while there, some credit card companies were -- I kid you not -- charging consumers an "inactivity fee" when they actually tried to save money by NOT using their cards.
This was a curious creation of that period in mid-2009 when the companies were doing everything they could think of to (hopefully) circumvent the new reforms laid out by the Credit CARD act. The Feds came down hard on the inactivity fee in August 2010, banning it outright and limiting late fees to $25. (Thank you!)
The latest incarnation of the ridiculous inactivity fee (and you knew there would be one) is the fee for not buying enough. Some credit card issuers now charge an annual fee unless you charge more than a specified amount on your card; with Citigroup, the amount is $2,400 a year, and the fee is $60.
If you expect to spend more than $2,400 on your card every year, no problem... until they change the rules and decide to charge you the fee anyhow, which they very well may. If you see this as just a way to get you to spend more money (as many do), I'd recommend you cancel ASAP.
Outta Space
That's all the space we have for today... but the credit card companies have plenty of new dirty credit card tricks up their sleeves, so expect me to trot out a few more in upcoming episodes.
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