The new regulations by the federal government on banks issuing credit and debit cards has come as a relief to the millions of customers using them. With a lot of restrictions coming into play because of the CARD Act that came into effect early this year in February, banks will lose to the tune of $5 billion in terms of the fees. This, in turn, translates as savings to the consumers using these cards.
USA Today, that predicts a savings of up to $5 billion for the customers, arrived at this figure based on the data given by the banks and other financial institutions. There are a total of 10 major plays in the credit card segment. Of the ten, seven major players gave rough estimates based on the impact of the new CARD Act.
Banks like JP Morgan Chase, Citibank, Wells Fargo, Barclays Group US, Bank of America, HSBC North America and US Bancorp will lose money in the range of $2 billion to $3.2 billion. The new rules implemented in respect to the overdraft facilities will further cause a loss of $2.6 billion for all ten banks put together.
All this translates as good news for the consumers. They will have to pay lesser amounts towards late charges, overdraft fees and various other charges and fees as per the new regulations implemented by the federal government. However, this necessarily does not mean that you will be saving a large amount of money.
Banks are wiser and know how to make up for the loss from a particular source of revenue. Much before the new laws came into the play, the banks undertook many proactive measures in order to minimize the extent of the loss. Anticipating huge losses when the act came into effect, they introduced many changes before hand. However, despite all the measures taken by them, it is the consumers who are having the last laugh now.
The credit card reforms have certainly brought about the much needed relief for the consumers, but in their wake, the reforms have also given rise to a number of absurd fees that have been introduced by the banks to minimize their losses. The most ridiculous of the lot is the 'inactivity fee' which the customer has to pay if he/she fails to use the credit card issued to them. This means the customers have to pay money for not using the card!
Despite all these minor changes, overall the CARD Act has done a world of good to the people who use their cards regularly.