I dedicated a number of posts over the past few months to the attention that the credit card industry was receiving from Congress. For awhile there, it seemed like I was reading something on nearly a daily basis about the ongoing investigations that Congress had dedicated most recently to credit card industry practices. But, recently, it seems as if all of the talk has died down as Congress has yet to make any changes.
For a little while there, credit card companies seemed to be making some positive changes on their own to their worst practices that were all in response to the pressure they were feeling from Congress. Nonetheless, credit card companies are continuing to make small changes to their terms in order to squeeze out a little more cash from their customers. Default fees, late fees, and cash advance fees, for example, are still going strong.
One expert points out that the Discover card has recently increased its cash advance rate from 20.99% to 22.99%. In addition, it has increased its late fees from $15 on a $500 balance to $19 on balances of less than $250 and from $39 on balances over $500 to $39 on balances of over $250. Yet other cards, like Chases for example, have added another tier to this format in order to get more money for late payments. As a result, customers will have to pay $15 when late on paying toward balances of $99.99 or less, thought they will pay $29 on balances between $100 and $249.99 and $39 on balances of more than $250.
For those customers hoping to see a break in their interest rates because of the half-point rate cut made by the Feds may be disappointed. If you have a variable-rate card, you might see a difference. But, keep in mind that it will take some time for this to take effect and that credit card companies still have the right to make changes to your interest rate anyway.
So, as I have been saying over and over, it is really best to use a credit card only if you can pay the balance in full each month. That way, you can enjoy the conveniences of using plastic while also getting rewards from your card.
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