Smart consumers are finally realizing a low debt load, especially credit card debt, is a very good thing.
Card issuers have long found their bread and butter in penalty fees and high interest rates paid by consumers who carry a balance. However, they are feeling a double whammy with both Government regulations limiting the interest, fees, assessments and charges the companies can place on consumers while at the same time consumers are paying down their card debt and not charging as much.
With consumer credit agencies helping thousands of people reduce their interest rates and card debts it is cutting into the issuer’s profits even more.
To counter this action card companies are increasing annual fees and charging higher merchant fees for use of the cards. They are also enticing consumers with more perks for using their cards. In addition they are looking at ways to tap into debit cards for more profits, but a provision in the new regulatory reform law will restrict the fees that banks and transaction processing networks receive from merchants every time a consumer uses a debit card to buy goods or services.
Now some consumers say they feel penalized for what they thought was good behavior. In fact some issuers are turning down people with credit scores that are too good because they feel they won’t make enough profit from them.
