A Shift in the Credit Card Tide

20May09

For those who haven’t been putting the pieces together regarding recent credit card legislation, Andrew Martin brings up an issue I felt was coming for a while now:

Credit cards have long been a very good deal for people who pay their bills on time and in full. Even as card companies imposed punitive fees and penalties on those late with their payments, the best customers racked up cash-back rewards, frequent-flier miles and other perks in recent years.

Now Congress is moving to limit the penalties on riskier borrowers, who have become a prime source of billions of dollars in fee revenue for the industry. And to make up for lost income, the card companies are going after those people with sterling credit.

Frankly, while I understand the move by the industry is inevitable, I do have to wonder how effective it will be. I would think that the people who maximize their returns on their credit card offers will be especially sensitive to any policy changes such as annual fees or shortened grace periods.

As one who currently takes advantage of a cash back card, I’m already looking into fee-less debit card options for the day when my current rewards get cut.

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