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MONDAY, NOVEMBER 23, 2009
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Credit Card Companies Cut Perks for Good Customers

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(Newser) – With revenues from high-risk cardholders dwindling, credit card companies are moving to impose stiffer fees on customers who've been accustomed to preferential treatment, the New York Times reports. Expect banks to bring back annual fees and slash reward programs, say industry insiders. And card holders who pay off their entire balance on time each month may find themselves paying interest anyway—for the weeks between purchases and paying off their bills.

“It will be a different business,” says a banking lobbyist. “Those that manage their credit well will in some degree subsidize those that have credit problems.” An analyst sees it as leveling the playing field. “There will be one-size-fits-all pricing, and as a result, you’ll see the industry will be more egalitarian in terms of its revenue base.” 

President Barack Obama speaks about credit card debt reform at a town hall style gathering at Rio Rancho High School in Rio Rancho, NM, Thursday, May 14, 2009.
President Barack Obama speaks about credit card debt reform at a town hall style gathering at Rio Rancho High School in Rio Rancho, NM, Thursday, May 14, 2009.   (AP Photo/Charles Dharapak)
President Barack Obama speaks about credit card debt reform at a town hall style gathering at Rio Rancho High School in Rio Rancho, NM, Thursday, May 14, 2009.
President Barack Obama speaks about credit card debt reform at a town hall style gathering at Rio Rancho High School in Rio Rancho, NM, Thursday, May 14, 2009.   (AP Photo/Charles Dharapak)
In this photo illustration a man holds up credit and debit cards on December 6, 2007 in Glasgow, Scotland.
In this photo illustration a man holds up credit and debit cards on December 6, 2007 in Glasgow, Scotland.   (Getty Images)
Visa recently said its second-quarter profit rose nearly 71%, beating Wall Street expectations, as cost cuts helped offset tighter consumer spending.
Visa recently said its second-quarter profit rose nearly 71%, beating Wall Street expectations, as cost cuts helped offset tighter consumer spending.   (AP Photo/Paul Sakuma, file)
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4 comments
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DeniseVB
May 19, 09 10:21 AM CDT
So those of us who pay all our bills on time are screwed? Nice. Will giving up my perks quarantee those deadbeats will start paying their own bills? I don't think so. Reply
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+4
woody66
May 19, 09 11:09 AM CDT
We must demand that the Obama government make sure that there is sufficient competition in the credit card business. No cartels allowed. With a truly competitive marketplace bank power will be kept in check and cardholders can truly shop for the best card deal. If you don't like the annual fee, switch to a card that doesn't have one. If you can't find one without a fee use your debit card and write checks. If we all acted this way the banks would get the message but we have been slaves to credit card convenience. Reply
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+2
Reader76617848
May 19, 09 12:45 PM CDT
I have been blessed to be able to pay my bills on time, but I have also found the convenience of credit cards AND the points to be attractive up until this point. This article will begin my discussion with my wife about changing our habits with credit cards. Reply
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+3
Reader78900361
May 19, 09 7:29 PM CDT
What would benifit consumers the most would be for congress to give Walmart a Bank Charter and permission to issue a clean Walmart Credit Card. Competition from Walmart is what your Visa, American Express, Mastercard and Discover card fear the most and would stop them from raising interest rates and imposing new or higher annual fees. Reply
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