Major credit card firms across the U.S. are changing their long-standing policies and card accounts to accommodate the growing demand of cardholders. In a dramatic shift in industry practice, large card firms are now starting to trim down highly elaborate and sophisticated card features and turning once-costly plastic into affordable cards.
According to credit industry analysts, card issuers are beginning to adapt their practices to the demands of consumers and government regulators ahead of new historic industry regulations. Heeding the call for more lenient card terms, major card firms have started offering credit cards that are considerably more affordable for struggling cardholders. The new breed of plastic is also expected to comply with the new regulations set to take full effect next year.
Instead of costly fees and charges, most of the new cards will have flat fees, experts say. One of the major contentions that consumer groups and government regulators have is the presence of hefty penalties and charges for cardholders who fail to make payments on time. By implementing a flat-charge amount, cardholders will no longer be charged penalties based on how much they owe their card firms.
Representatives from the various card companies making the changes also say that consumers will be able to avail of a single rate for all major transactions. These may include balance transfers and cash advances. Analysts say that by eliminating existing fees and replacing them with a single rate amount, card issuers can see to it that their cardholders remain with them instead of switching to other card companies.
Analysts say that because of the current economic situation, Americans are looking for credit cards that provide them better control over their expenses. Other card firms have also introduced new cards that would allow cardholders to pay off their balances in less time. Experts say that cardholders will now have the chance to choose which expenses to pay off first and prioritize. Balances that have been set aside for the meantime can also be paid off and managed better using the card issuers' debt management services. Consumers can set target dates for paying off their balances and card companies would compute for the monthly minimum payments to achieve this target.
Some experts, on the other hand, say that card companies are attempting to clean their image before the implementation of tougher rules next year. They add that the radical changes to their policies are part of their marketing strategies to avoid being penalized by federal regulators.