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When is this supposed to happen? Inever read those notices they send out. There is so much fine print, that i give up.
It's not happening yet, but I wouldn't be surprised. The CC companies will simply do an analysis to see whether they'll make money and/or lose business. My feeling is that they would probably make some cash in the short term, maybe even enough to cover more defaults, but it's probably not going to be a very good long-term business model. Competition will probably ensure that it doesn't last long.
I know several people who work in retail and hotels, and people are paying with cash much more frequently than they used to for just about everything. I know I'm not using my cards any more.
If they do that, I will stop paying by credit card.... which means businesses will cheat more on their taxes as people pay with cash and cash is left off the books... government gets less revenue... I suspect this all has to do with the government cracking down on bad credit card practices... but then credit card companies would lose out if that were the case, less people use credit cards = less profit for them... I suspect Visa won't let that happen since their money is based on number of transactions...
I was talking to some people in the banking industry who work with the Credit Card division about the topic of CC interest and service charges. I was told that the amount of competition in the Credit Card business continues to go down. More than 80% of Credit Cards are now controlled by Chase, Citicorp and Capital One.
Anyway, they hope to eventually control enough of the market so they can start charging interest from the date of purchase for all customers including people who pay their accounts in full each month. Basically all customers who charged during the month would pay some interest unless they had a Credit Balance on their account larger than the charges.
Reduced competition in the Credit Card industry has already:
Increased interest rates, late charges, returned check charges, fees for cash advances and convenience checks, annual fees, etc. It is only a matter of time before we all pay alot of interest regardless of our payment habits.
I seriously doubt this will happen. Even if Chase/Citi/Capital One have the corner on the cc market, for them to start charging interest from the date of sale would make the conditions ripe for other banks to offer cards with the current model of charging interest. Chase/Citi/Capital One would effectively push themselves out of their cornered market.
The only way this would work would be if Chase/Citi/Capital One could convince the cc underwriters (VISA/MC, etc) to stop issuing underwriting to banks wanting to issue new credit card account that wish to charge interest using the current model. In that case, then let the anti-trust proceedings begin!
I was talking to some people in the banking industry who work with the Credit Card division about the topic of CC interest and service charges. I was told that the amount of competition in the Credit Card business continues to go down. More than 80% of Credit Cards are now controlled by Chase, Citicorp and Capital One.
Anyway, they hope to eventually control enough of the market so they can start charging interest from the date of purchase for all customers including people who pay their accounts in full each month. Basically all customers who charged during the month would pay some interest unless they had a Credit Balance on their account larger than the charges.
Reduced competition in the Credit Card industry has already:
Increased interest rates, late charges, returned check charges, fees for cash advances and convenience checks, annual fees, etc. It is only a matter of time before we all pay alot of interest regardless of our payment habits.
Well, then I guess everyone will stop using credit cards. It is just not worth it.
There is a reason why so few banks control the market on credit cards, and this would make it difficult for others to come in and compete. Charging interest effective the date of the transaction would be just the next step in the falling service provided to consumers. Similar to the 5% cash advance fees, higher interest rates in an era of cheap money, reduced perks for charging, and higher fees. All were implemented without a competitor really coming into the market to offer a better alternative.
Yes, interest from the date of the transaction is coming and soon.
Quote:
Originally Posted by broadbill
I seriously doubt this will happen. Even if Chase/Citi/Capital One have the corner on the cc market, for them to start charging interest from the date of sale would make the conditions ripe for other banks to offer cards with the current model of charging interest. Chase/Citi/Capital One would effectively push themselves out of their cornered market.
The only way this would work would be if Chase/Citi/Capital One could convince the cc underwriters (VISA/MC, etc) to stop issuing underwriting to banks wanting to issue new credit card account that wish to charge interest using the current model. In that case, then let the anti-trust proceedings begin!
Its a lose-lose either way for them.
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