With the Credit Card Accountability Responsibility and Disclosure Act of 2009 going into effect today, don’t expect giants such as Citigroup, BOA, or American Express to lie down and take a 12 billion dollar beating with the docility of a Geisha.
These savvy slave owners simply have too many ways to counteract federal legislation designed to empower the American consumer, namely the inability for the American consumer to spend responsibly.
Couple this with the additional fees and expected rate hikes and it would be the acme of folly to expect the credit card industry to not roll with this gut punch and deliver it’s own counterattack. In a country where the average citizen holds $5400 of credit card of debt, according to credit tracking company TransUnion, and spends more money on overdraft fees than fresh vegetables each year this shouldn’t prove too difficult.
While an important piece of legislation, card companies are still not prevented for raising rates on new purchases as long as they provide 45 days of notice. In addition, many companies are sending out notices to their customers informing them that they are being switched from a fixed interest rate to a variable one. While this is presently quite low the industry is simply banking on the opportunity to steadily raise rates over time.
Expect nothing less than a flood of newfangled fees, late charges, and general harassment from this shameless lot.
Presently only 20% of cards issued in the US have annual fees but this number is expected to rise dramatically. Citygroup and American Express have already informed a number of their customers of their intention to begin charging this yearly tax.
Foreign transaction fees are another area where these giants will look to replace their ill-gotten gains. Both Citi and Bank of American have already instituted a blanket 3% fee on all foreign transactions whether or not said transaction was in dollars or an alternate currency. Discover Financial in a slightly less cuntish move has simply added a 2% charge.
Quite simply, expect to be nickel and dimed until this legislation’s effects on these companies bottom lines is all but erased.