Credit Cards Fees Doubled Over Ten Years

Since 1994, credit card late and overlimit fees have more than doubled. We’re no economist, but that doesn’t seem to keep pace with inflation.

Are Americans really just getting that much riskier as borrowers that lenders have to tighten the screws so much? — BEN POPKEN

Bank fees are more outrageous than ever [MSN Money]


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  1. FLConsumer says:

    Someone correct me if I’m wrong, but weren’t laws changed a few years ago which paved the way for this sort of thing?

  2. ColinColin says:

    How about people learn some responsibility and not be late or go into overdraft on their CC?

    Charge them even MORE and pass the savings on to those that pay their bills in the form of lower interest charges.

  3. The Bigger Unit says:

    Ben: In a word, “Yes”.

  4. mikyrok says:

    Considering U.S. personal savings have declined from 5% in 1994 to -.03% in 2005 as well as the amount of bankruptcy filings increasing from .78 million in 1994 to 1.6 million in 2004 I would have to say the answer is a resounding yes.

  5. FLConsumer says:

    @ColinColin: In a way they have… Some 10 years ago, cash back on credit cards was unusual, limited to Discover. Now I get 1.5% unlimited cash back on everything is a very nice reward for paying my bills in full, on time. Even Discover’s upscale card had cash-back limits on it.

  6. rdm says:

    Don’t banks make a ton of money off of us anyway? Why not keep jacking up the fees? People will just keep paying them.

  7. gundark says:

    Yeah, well if I hadnt been laid off 5 times in my life already (I am only 31), maybe things would be a little easier. Its great to know my CEO made a $4 Million bonus by making sure I didnt have a job. How many employees could have been kept on for that $4 Million I wonder?

  8. Roosh says:

    don’t worry: the credit card companies said the bankruptcy law will lower all these fees. they wouldn’t lie

  9. glomm says:

    Penalty fees have gone up, but at the same time interest rates and membership fees have gone down. It is a trade-off.

    Interest rates are a reflection of the risk that you will pay late or go over your limit. The fees are a punishment for when you actually pay late or go over your limit. If they cut fees, they would have to simultaneously increase interest rates to maintain the same level of risk.

    What I object to is when they apply fees in error, or delay crediting your payment, or introduce hidden fees. But that is just them being dishonest, which is an entirely different problem.

  10. gibbersome says:

    Some people are just not getting the point. Yes, people make mistakes, but if we have a financial system rigged to profit off those mistakes what kind of a world are we living in?

  11. mac-phisto says:

    washington should’ve piggybacked legislation to tighten up exorbitant fees in w/ that wonderful bankruptcy law that went into effect not too long ago. now they can charge whatever they want and they don’t have to worry about you skipping out on it under chapter 7 (as long as you have income).

  12. thrillhouse says:

    Are Americans really just getting that much riskier as borrowers that lenders have to tighten the screws so much?

    No, companies are getting greedier. The greed rate is independent of the inflation rate. They have effectively made the switch to a fee based system. Its the same with short-term loans, you make your money on the fees not on the interest.

    And I hate to be a stickler, but the 1994 rates were doubled by 1999 (5 years). Those 2005 numbers are closer to a trifecta.

  13. tazewell78 says:

    “We’re no economist, but that doesn’t seem to keep pace with inflation.”

    It’s not supposed to keep pace with inflation, it’s supposed to keep pace with the number of nimrods who don’t pay their bills, which is increasing quickly. Is that the fault of the credit card companies? Do we need the gov’t to step in and protect us from the big bad companies who proffer the option of deferred payment?

    Companies getting greedier? Give me a break…they’re not in it for your platitudes.

  14. Imhotep says:

    I just got dinged $39 from my MC for being late… OUCH!!

    Guess I better go back to paying for stuff with cash now. Or just stop shopping… Hey!

  15. kindall says:

    Many banks will, “as a courtesy,” waive a fee for you every once in a while if you can make any case for it at all. So if you make the occasional mistake, you’re fine. The people who will really get dinged are people who are late habitually. Really, though, how dumb do you have to be to get repeatedly dinged for going over your limit? You do it once, and then you learn your lesson and never do it again, especially when it costs forty bucks a pop.

    Most of the big banks now offer tools to help you avoid those fees. All you have to do is take advantage of them. For example, you can often get an e-mail alert when you are approaching your credit limit or when a payment is due. Some banks will even let you make the minimum payment from your checking account automatically every month, so you will never ever be late again. Seriously, this stuff isn’t rocket science. Take advantage of it.