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Old 10-20-2009, 07:36 PM
 
Location: Planet Eaarth
8,954 posts, read 19,710,251 times
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The latest fee punishes the folk's who pay off their cards!

Latest bank fee is for paying off credit card on time every month - USATODAY.com
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Old 10-20-2009, 09:11 PM
 
Location: Great State of Texas
86,052 posts, read 80,683,763 times
Reputation: 27699
I had heard about that. A friend at work just got hit with a $75 "annual fee" on his CC.
I called up my CU and asked them if they were planning anything like that and they said no.

I pay in full each month. I'd leave in a heartbeat if they started doing that.
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Old 10-20-2009, 11:39 PM
 
Location: Conejo Valley, CA
12,470 posts, read 19,051,236 times
Reputation: 4343
Contrary to popular belief Banks are not charities. People that charge a couple hundred a month and pay off their balance each month generate no profit. A credit card is a product, if you just charge on the card here and there and always pay it off you are going to need to start paying for the product. Seems far enough.
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Old 10-21-2009, 01:24 AM
 
10,494 posts, read 25,815,335 times
Reputation: 6704
Quote:
Originally Posted by user_id View Post
Contrary to popular belief Banks are not charities. People that charge a couple hundred a month and pay off their balance each month generate no profit. A credit card is a product, if you just charge on the card here and there and always pay it off you are going to need to start paying for the product. Seems far enough.
This is not true. Every time you make a purchase on the card, the credit card company charges a fee to the merchant. So even if you pay off the balance in full each month, the credit card company still makes money.
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Old 10-21-2009, 01:46 AM
 
Location: Conejo Valley, CA
12,470 posts, read 19,051,236 times
Reputation: 4343
Quote:
Originally Posted by las vegas drunk View Post
This is not true. Every time you make a purchase on the card, the credit card company charges a fee to the merchant. So even if you pay off the balance in full each month, the credit card company still makes money.
So to demonstrate I'm wrong, you yap about revenue without taking into consideration the costs? Yes, credit card companies get merchant fees and perhaps what you said would make sense if the following things were free:

- Networking
- The development and maintenance of a banking system
- Cost to store relevant data
- Cost to provide consumer predictions
- Cost to mail statements each month
- Costs associated with customer service
- The cost to process a payment

and so on. But they are not free. If the card is a rewards card then credit card company is getting around .8%, if you are charging an average of $200/month that is a whole $19.2/year in revenue. If its not a rewards card then they get around 1.6%, for a total of $38.4. Just mailing statements and processing payments is likely to cost the bank around $20~$25/year, not to mention all the other costs.

So, as I said. A costumer that only on average charges $200/month and pays off their balance each month is not in general profitable for a bank. These are the people that are going to be targeted with annual fees. On the other hand people that run a balance, or have charges in the $400+/month range are unlikely to be targeted.

Now, some banks/credit unions may be willing to eat the costs to keep your business on other fronts.
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Old 10-21-2009, 01:58 AM
 
Location: TX Hill Country-Helotes, Pipe Creek/Lake Hills & San Antonio, TX
844 posts, read 1,508,999 times
Reputation: 1370
Exclamation Ludicrous!

This is so true. It happen to me! I also heard about this a couple of months ago on CNBC, and I've even read this in several finance news articles. They will always try to find a way to make money!!! This is ludicrous!!!
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Old 10-21-2009, 02:00 AM
 
Location: southern california
61,281 posts, read 83,380,582 times
Reputation: 55458
they want you to keep using the credit cards. closing them is something they dont like.
credit should tighten during a recession and recovery it did not.
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Old 10-21-2009, 02:06 AM
 
10,494 posts, read 25,815,335 times
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Quote:
Originally Posted by kittykat13 View Post
This is so true. It happen to me! I also heard about this a couple of months ago on CNBC, and I've even read this in several finance news articles. They will always try to find a way to make money!!! This is ludicrous!!!
If you want to blame someone, blame Obama for it. The bank has to make money to stay in business, and since they are going to lose a lot of money with the new regulations, they have to make up for it somewhere else.
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Old 10-21-2009, 02:41 AM
 
Location: Conejo Valley, CA
12,470 posts, read 19,051,236 times
Reputation: 4343
Quote:
Originally Posted by kittykat13 View Post
They will always try to find a way to make money!!! This is ludicrous!!!
What, its ludicrous that a business is trying to find a way to make money? Should they instead find ways to lose money?
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Old 10-21-2009, 07:14 AM
 
Location: Sverige och USA
702 posts, read 2,928,821 times
Reputation: 419
Quote:
Originally Posted by las vegas drunk View Post
If you want to blame someone, blame Obama for it. The bank has to make money to stay in business, and since they are going to lose a lot of money with the new regulations, they have to make up for it somewhere else.
So instead of blaming the thousands of people that forfeit or declare bankruptcy, you blame Obama.

The new regulations are a good thing and is about time!
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