August 11, 2009
-
Finally, Some CC Relief, Pt.1
No more over-the-limit fees.It's about time. Signed off by President Obama back in May, the Credit Card Accountability, Responsibility and Disclosure Act should start delivering us relief from some credit card penalties. The first one up is the "Over the credit card limit" penalty which, in the past has caused so much upheaval. Due to go into effect in October, Amex and Discover are proactively taking the lead. Amex is already sending out the notices to customers that this obnoxious $35 - $40 penalty for charging over one's credit card limit will no longer be applied. Discover Card Services is soon to follow. After 25 years of oppression, no one is going to lament losing this burden. Other large lenders like Citigroup, Chase, Capital One and Bank of America are expected to follow suit but we have no official word on that yet.
Actually, this bill was much more comprehensive then just one penalty area. Extensive changes were implemented but have not come to force as yet. In the meantime, many credit card lenders have gone into 'grab-status' to get all they can before it does. Along with the notice came a warning that, although the per occurrence is gone, other consequences could result. Interest rates could be jacked and late penalties could stiffen. The provision is extended for credit card holders to allow the over-limit penalty for permission in advance for the privilege of going over. These lenders will perform a technical appraisal of the card-holder's credit-worthiness before making these judgments. Likely, these calculations are already in place and it was found more profitable for the bank to do it this way. For a time, they will be able to brag to their customer how they don't charge a fee and their competitors do. Likely, the rest will copy, soon enough.