Amid the new Credit Card Act which limits the credit card issuer’s most profitable practices, many credit card companies are looking for new ways to generate additional income. New credit card fees such as annual fees and new banking fees for checking account customers are just a couple of ideas that banks are implementing to offset the loss of revenue caused by the Credit Card Act.
Here’s what credit card consumers should look out for:
- Annual fees for some credit card consumers. What might be a surprise for some credit card consumers is that customers who pay off their balance every month incurring no interest may be most vulnerable to incurring annual fees. Credit card issuers are in the business of making a profit and the only way they can do that is to earn money from interest and they won’t do that if their consumers pay off their balance very month.
- Some banks are also looking to their checking account customers to offset the losses from the credit card businesses. While free checking is currently abundant, many analysts predict that many more banks will do away with free checking and begin charging a monthly checking account fee. Some banks have already begun this process; however, customers with direct deposit or a high balance may be able to avoid paying a monthly checking account fee.
- Also, other credit card companies are offering an incentive for consumers to charge more onto their credit cards by offering to waive the annual fee if they charge a certain amount of purchases onto their credit card. Citibank already has a program like this for its credit card. While Citibank charges $60 a year in annual fees, they will waive the fee if the consumer charges at least $2400 for the year onto their credit card.