May 2009
19
If you happen to use your credit card (CC) as I do, you pay off the balance each month. CC companies put you (me) in that category of "deadbeat" because they only make money off of the 2-3% that they charge the merchant.
According to the NYT article below, the new CC legislation may eliminate my cash-back program, grace period, and possibly add an annual fee. I will not stand for it and will probably revert back to using my debit card for all purchases rather than my CC.
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Banks are expected to look at reviving annual fees, curtailing cash-back and other rewards programs and charging interest immediately on a purchase instead of allowing a grace period of weeks, according to bank officials and trade groups.
“It will be a different business,” said Edward L. Yingling, the chief executive of the American Bankers Association, which has been lobbying Congress for more lenient legislation on behalf of the nation’s biggest banks. “Those that manage their credit well will in some degree subsidize those that have credit problems.” ......
Robert Hammer, an industry consultant, said the legislation might have the broad effect of encouraging card issuers to become ever more reliant on fees from marginal customers as well as creditworthy cardholders — “deadbeats” in industry parlance, because they generate scant fee revenue.
http://www.nytimes.com/2009/05/19/business/19credit.html?_r=2
©2009