We were so naive. We honestly thought that the major banks and credit card issuers would engage in a big campaign to clean up their image (if only for show), while getting behind some self-serving consumer financial protection regime.
But no. They reall seem hellbent on making their customers hate them, while giving ammo to zealous regulators and consumer-advocacy types.
TheStreet.com: It seems Bank of America (BAC) has already reneged on its Oct. 6 promise to stop raising interest rates on existing customers’ credit cards.
A week after making the pledge, Bank of America said it would begin introducing annual fees, ranging from $29 to $99, to select customers next year. The two announcements result in a net win of zero for consumers as well as an unethical bait-and-switch. Why? Because, according to regulations, interest rates and annual fees fall under the same umbrella. They are both considered finance charges.
The introduction of new annual fees to existing credit-card accounts will result in increased finance charges. For insight, consider that the addition of an annual fee of $50 on a credit-card account with a $500 balance and a 10% interest rate would double total yearly finance charges. Bank of America is simply using the introduction of new fees as a way to shore up its credit-card portfolio in the face of narrowing profit margins. Read the whole thing >
This, of course, comes amid a flurry of alleged bad behaviour on the part of card issues, ranging from shock cut-offs to insane APRs. It’s like they’re making it too easy for their haters.