A recent story (Dec. 21) by Alexis Leondis I found on
Yahoo Finance done jointly with BusinessWeek wades through changes in credit card practices. Most of these changes are not good for customers. Apparently the banks didn't feel your tax dollars spent on executive salaries were enough. They want to supplement that with interest and fees on Americans' credit cards. The banks are going to find it more difficult to jack up rates on fixed-rate cards, so they will be trying to move all customers to variable-rate cards. Lots of other shenanigans. Rates may jump
dramatically after the change from the promotional rate to the variable rates occurs. And there are "rate floors". Your credit card rate goes up if the interest rate index goes up, but they won't go down below the rate floor.
In years past the largest fee didn't kick in until you had a balance over $1,000. Now the largest fees will initiate around a $250 balance. Also, those people moving their balance to another card to benefit from the low introductory rate will have to pay a higher charge for that transition.
And the real devious maneuver the banks are pulling is
inactivity fees. That is---the customer will be punished with fees for
not using their credit cards. Yes you read that right. Again read the
Alexis Leondis story carefully, she explains it much better than me.
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