Consumers who compare credit cards may avoid new fees

Less than a year after the passage of the Credit Card Accountability, Responsibility and Disclosure Act, lenders are looking for new ways to increase consumer fees, and individuals who compare credit card offers could reap rewards.

Some lenders are raising minimum payments on accounts, reviving annual fees and adding charges to cards with low credit limits. Others are charging for balance transfers and cash advances.

Lenders have increased consumer charges, as the CARD Act is expected to cost credit card issuers $11 billion in 2011, according to The Wall Street Journal. Issuers such as JP Morgan Chase and Bank of America are upping minimum payments in order to maximize late fees.

“Rising minimum payments can cause borrowers to default and help generate greater fee income for issuers,” Victor Stango, an associate economist with the Federal Reserve Board, told the Journal.

JP Morgan Chase has gone as far as to eliminate debit cards for new customers starting in January. Other lenders have been accused of signing up customers to programs like payment-protection insurance without authorization.

The Federal Reserve has responded to the efforts by announcing proposals to ban certain charges, but for now, consumers are left to compare credit cards in order to avoid the fees. - Dailyrosetta.com

Tags: credit card fee, Credit cards

Posted by FinanceAZ on Apr 7 2011. Filed under Credit cards. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry