Saturday, November 28th, 2015

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Meet the New Card, Same as the Old Card

Credit cards are a step ahead of the game.You didn’t think it was going to be that easy, did you?

The Credit Card Accountability, Responsibility and Disclosure Act of 2009 took a wrecking ball to some of the more frustrating practices of the credit-card industry in an effort to help Americans trying to stay and get out of debt. Some estimates put the cost to the industry at $390 million per year of lost revenues from fees.

So the banks are fighting back, reports the Wall Street Journal.

Annual fees rose 18 percent, to a median level of $59, between July 2009 and March 2010. Cash-advance and balance-transfer fees rose 33 percent.

Banks are also attempting end-runs around some of the newly banned practices. Inactivity fees are out; it’s now time to say hello to annual fees which go away after a certain threshold.

The CARD Act stipulates a 21-day gap between the date the company mails a payment and the payment due date, but a lot of people are complaining that they’re not getting enough time.

Foreign-transaction fees are up over 50 percent, and balance transfers are now 33 percent more expensive.

Bad news for those trying to get out of debt: Minimum monthly finance charges are rising too, from an average of 50 cents to as much as $1.50.

For young people, low-credit-limit cards have been a boon, allowing college students to get a foot in the credit-card door. The CARD Act bans fees of over 25 percent of a customer’s credit line, so the banks are hitting those who use those cards with upfront processing fees, which can eat into the limit quickly.

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