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Credit Card Applications » News » Other » Consumers Surprised by Creative New Fees

Consumers Surprised by Creative New Fees

October 26, 2010
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Although the CARD Act has ended some tricky strategies applied by the credit card companies, there isn't much to celebrate as far as the consumers are concerned because there is more bad news hidden in their card statements. According to a latest report, card companies have found quite a few different ways to exploit the credit card customers and levy millions of dollars in hidden charges and fees that the customers are not even aware of.

With profitability of the credit card companies severely restricted, researchers and analysts feel that they would go to greater lengths to come up with new ways of making up for the lost profits. These changes and charges would be levied in a way as to the balance out the loss in revenues caused by the restrictions applied by the CARD act. These new changes and hidden charges are adding up to the balances of the credit card customers. While some of these charges were added way before during the recession, a few of them were conjured after the CARD Act came into force. Whatever be the scenario, the one thing in common is that none of these new hidden charges seem to be prohibited by the CARD Act.

Those with fixed rate credit cards do not really have to worry about changes in their current interest rate on the balances as per the credit CARD Act. However, things don't seem that good for those credit card customers who have credit cards with variable interest rates, in which case a fixed digit is added to the rate of index. In fact credit card companies, seem to be choosing the highest prime rate in a 90 day period which would cost the customers a whopping 720 million dollars. It is very hard to predict where the prime rate is coming from which makes it nothing more than an exploitation of the customers.

The other part of the expanded fees is that while prime rates can go down with time, the new pricing strategies can ensure that card issuers have a lower limit on the variable rate, which means it cannot go down below a certain limit. Another strategy being used is to charge the late fee depending on the card balance. Also cardholders are being slapped with foreign transaction fees wherein foreign includes any transaction that will touch a foreign bank at any stage of the transaction.

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