Card Statements Will Now Cost Consumers

There is an emerging trend that is pushing consumers to go green by using less paper, less energy, less manpower with a goal of saving more and wasting less. Is an imposed credit card statement fee of $1.00 one more way to push the environmental agenda, make up for lost revenue as a result of the credit card act or both?

The Credit card Act of 2009 is expecting to cost the banking and credit card industry billions because of the regulations being put into effect in an effort to protect credit card customers from countless and unrestricted fees. As a result of that reform credit card companies are desperate to find other ways to recoup lost revenue.  The $1.00 fee is just one example of the consequences of a plan that was put in place to protect consumers from the mounting debt associated with having a credit card; or multiple credit cards.  Credit card debt is a national issue that continues to be the cause of many financial problems. Credit card availability, excessive use fees, hidden charges and irresponsible spending behaviors have driven many Americans to bankruptcy.

Alliance Data Systems a third party credit card management company began issuing communications to their cardholders about this change in December of 2009.  Effective in February of 2010 cardholders would be forced to either take advantage of free online credit card statements or be charged $1.00 to have the monthly statements mailed to them.   Spokespersons from Alliance discuss that their decision has positive impact on the environment and those cardholders who do not regularly use their card and get a statement indicating a zero balance each month.  Those who do regularly use their card can take advantage of the other benefits to online statements such as email alerts and online bill paying.

Retail stores offer what are called private label credit cards designed specifically for retail stores.  By having a special store credit card retailers can set fees design their own terms and conditions and market directly to their cardholders in-store deals that encourage them to shop at their store to take advantage of the perks of being a cardholder.  These things all increase sales and produce profits.  These same things that benefit the retail stores can be dangerous for the cardholder.  Typically private label cards are managed by a third party.  Alliance Data Systems is an example of that third party management.  The third party creates the contracts and manages the payments as well as negotiates debt collection when a cardholder fails to pay.  A third party also increases the costs that trickle down to the cardholder.  Charging $1.00 for a paper statement is a perfectly legal and acceptable way for retailers to get their money.  It may not be decision that is considered ethical, popular or even in the best interest of all of the cardholders but it is in fact legal and non-negotiable, without exception for individual circumstances.

According to data from CreditCards.com over 90 retail stores who are managed by the third party Alliance Data Systems will be imposing the new fee for the paper bill.  Although Alliance is taking some heat from its cardholders as well as the media for being the first of probably many, to announce this decision they are prepared to proceed as planned with instituting the new $1.00 fee.  This announcement by Alliance is sure to open the floodgates for the many other third party credit card management companies to begin instituting similar fees in the upcoming months.

The charge of $1.00 per statement may definitely push many consumers towards that online statement option that is available through their credit card lender because they don’t want to spend that extra dollar.  Others may just continue to get it mailed because to them the principle is worth the dollar. There are still a high percentage of people that rely on the good old fashioned US mail a hand written personal check and a stamp to pay their monthly bills.  Those that do not want to pay the dollar in this case will be forced to consider an online option.

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This entry was posted on Friday, February 5th, 2010 at 1:00 pm and is filed under Credit Card News. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.