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Credit Cards Crank Up Abusive New Fees

San Francisco animator Mark Fiore has cleverly captured our most cynical fear about the new credit card regulations that take effect in February -- the card companies will just find new ways to abuse us.

San Francisco animator Mark Fiore has cleverly captured our most cynical fear about the new credit card regulations that take effect in February — the card companies will just find new ways to abuse us.

“As reform accelerates so will the inventiveness of our fees, rates and gouging,” a fake industry spokesman says in the video. “Much like the ‘inactivity fee’ gives you the opportunity to be charged for staying out of debt, the ‘cardless fee’ will charge you for not having a credit card at all.” (Click here to watch the animation.)

Indeed, the Center for Responsible Lending contends that’s exactly what’s happening in an ominous new report called: Dodging Reform: As Some Credit Card Abuses Are Outlawed, New Ones Proliferate.

The Credit Card Accountability Responsibility and Disclosure Act approved last May “addressed the hidden and deceptive pricing strategies that had been the most costly to credit card users,” the report says.

“However, some issuers appear to be working to compensate for part of this lost revenue by instituting or accelerating new practices that increase hidden costs on consumers.”

Those new fees and rules”appear to be primarily designed to take advantage of inattention, lack of knowledge and documented behavioral biases exhibited by consumers” and “none are prevented by recent Federal legislation or Federal Reserve rules.”

The inactivity fee mentioned in the animation is alreaday being imposed on some accounts. The cardless fee is total fiction.

At least right now.

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Comments (9)
1 Star2 Stars3 Stars4 Stars5 Stars (8 votes, average: 4.50 out of 5)
9 Existing Comments
  1. Daniel said:
    on December 24th at 02:22 pm

    There gonna get you. One way or another, it will cost people money. Big time executives are still going to get theirs.

  2. Dick Brandlon said:
    on December 24th at 09:21 pm

    When will the American people realize that “free enterprise” is a fiction? The folks screaming about “socialism” are the ones who are being screwed the most by our friendly banks and insurance companies.
    I wouldn’t mind free enterprise if I could get free from the enterprise the banks use to chisel me.

  3. Fishsticks said:
    on December 25th at 10:46 am

    This isn’t real tough – don’t use credit cards except for emergencies. Spend less than you make. That is the best way to screw these over zealous banks. Credit cards are their bread and butter and so hit them where it hurts. Use cash, pay off your bills, switch to a credit union.

    @Dick Do the above – you are not obliged to use these banks. I scream corporate crony-ism not socialism.

  4. said:
    on December 25th at 02:07 pm

    Last week we made note of a subprime credit card attempting to implement a 79.9% APR. The problem with (some of) these companies is that they pray on people who are already in financial shambles.

    @Fishsticks very sound advice, pay cash whenever possible. If using a credit card is a necessity make sure you are only using it to purchase necessary items (food, gas, etc) not holiday shopping, leisure spending and the like.

    Also, switching to a credit union is def sound advice as they are member-owned and not-for-profit.

  5. QuickCredit said:
    on December 25th at 04:08 pm

    Cash back Credit Cards; Been There, Done That

    It has become apparent that cash back credit cards have recently been on a steep decline as far as availability goes. Some might say that in these particularly difficult financial times, having CASH BACK would be what they want, ideally.

    In 2005, 43 different credit cards offered cash back as a reward. in 2009, there are only 13. But what consumers need to come to realize, is that the cash back reward was usually limited to 15-20 dollars a month. so wouldnt you prefer to get air miles, which may save you much more than 15-20 dollars a month, next time you travel? Or how about something that you use everyday, like fuel. Free fuel is the same thing as free money essentially.

    Busineses are the ones who seem to truly benefit from the cash back credit card reward. They don’t seem to have a limit per month, rather a .5% on their spendings.

  6. Gary Anderson said:
    on December 25th at 06:41 pm

    I have a better idea: Kick these banks in the balls by walking away from your credit card debt. These banks are committing legal usury because our government has abdicated responsibility to protect the consumer. 10 percent added to 1/2 percent borrowing costs should be 10 1/2 percent fees Walk away and it is not immoral to do so. The immoral ones are the banks.

  7. Credit Card Chaser said:
    on December 26th at 01:07 am


    How do you define usury? I personally could care less if a credit card company decides to charge 3,000% interest because I would just never use one of their credit cards.

    There are many different credit cards with different fee structures and different interest rates. There is no one forcing people to sign up for any given credit card. People have the right to choose any credit card they like or none at all.

    As long as card issuers are upfront and honest about their fees then they should be able to charge whatever interest rates they want to (and they can for the most part*) – however, your idea of not paying back debt that you decided on your own to take out is certainly a very bad decision.

    No one forced you to rack up credit card debt and spend more than you earned. If you decide to not pay back the debt that you owe then yes you are in fact making a very bad decision.

    It is actually pretty repulsive to hear you say things like “walk away from your credit card debt…because our government has abdicated responsibility to protect the consumer” WOW – now its the government’s fault and the credit card company’s fault because YOU racked up credit card debt and spent more money than you had in the bank. Riiiight…

  8. said:
    on January 6th at 12:08 am

    I think Gary Anderson was reffering to his bail out money. Mr. Anderson, Obama says the check is in the mail.

  9. Thomas said:
    on April 6th at 03:53 am

    I really like your blog and i respect your work. I’ll be a frequent visitor.