Finally, American Express and Discover card customers won’t have to pay penalties of $35 or $40 for going over their spending limits.
The New York Times reports: “Rather than levying the fee automatically, both firms will now use technology to decide whether and when to allow consumers to exceed their limit, based on the cardholders’ recent spending and creditworthiness.”
AmEx and Discover are no saints, of course. Washington’s recently passed Credit Card Accountability, Responsibility and Disclosure Act required the banks to develop a system to prevent customers from going over their limits; it was cheaper to just drop the fees than to develop the mechanism. It’s unclear if Bank of America, Capital One, Chase or Citigroup will ditch the penalties too.
Now, here’s the real question: When will the banks finally eliminate fees from overdrafts made on a debit card purchases? Or is that $39 billion cash cow just too lucrative to pass up?
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