Credit Card Issuers Raising Fees

A few months ago consumers could easily choose from a bevy of 0% APR credit cards or no fee balance transfer credit cards without thinking twice.

It seemed that the opportunity to transfer high-interest debts was endless, and it often didn’t cost a thing to shift balances from card issuer to another.

But with the recent credit woes in the mortgage industry, credit card issuers are now beginning to take notice and look at their own seemingly high-risk practices.

Up until recently, Citicards offered no fee balance transfers on the majority of their credit cards, but now you’re more likely to see a $50 charge or 3% of the balance.

Same with Discover, who used to offer no fee balance transfers, but has since upped their fee to anywhere from $50-$75.

You may also notice that 0% APR periods have dropped from 12-15 months down to six months in some cases, and that some card issuers aren’t offering 0% APR at all.

Many are now offering a more conservative APR around 2.99% or higher.

Late fees and minimum payments are also rising, with credit card issuers like American Express imposing larger penalties and demanding that more of the balance is paid off each month.

Capital One has recently announced that it will raise interest rates on some of its credit cards, with some rates rising from 4.99% to a whopping 13.99%.

The changes are likely in part a response by the credit card industry to combat credit card arbitrage, while adjusting to the recent credit woes and the stagnating economy.

The timing of the news is curious, coming after consumer groups had attacked credit card issuers for charging too much and driving more and more consumers into debt.

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3. U.S. Senate Subcommittee Members Slam Credit Card Issuers
4. Bank of America Raising Interest Rates on Credit Cards with Balances
5. Should Credit Card Issuers Nix Introductory Rates?