It's always feeding time for the banksters!
[I like this image so much I'm going to sticky it. --lambert]
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.
They're sure doing their bit to revive consumer spending, aren't they? Let's all pray to The God(ess)(e)(s) Of Our Choice, If Any, that the recession is only L-shaped.
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 [Thanks, Democrats!], so banks can continue to lift them, albeit at a slower pace and with greater disclosure.
People who routinely pay off their credit card balances have been enjoying the equivalent of a free ride, [said David Robertson, publisher of the Nilson Report], because many have not had to pay an annual fee even as they collect points for air travel and other perks.
“Despite all the terrible things that have been said, you’re making out like a bandit,” he said. “That’s a third of credit card customers, 50 million people who have gotten a great deal.”
So, getting a break because you pay your bills on time is the equivalent of "Cadillac health insurance," eh? Can't have that!
It's all about the fees, baby!
NOTE Link to Ames via Economic Populist.