When the House Financial Services Committee meets again next week to discuss credit card reforms, they'll have something else to talk about -- a new way for credit card firms to raise your interest rate.
Discover announced recently that there's a new penalty for cardholders who exceed their credit limit, in addition to the $39 fee -- a higher interest rate.
Many consumers might not even realize that they can exceed their credit limit, and in fact the term has largely become meaningless. Card issuers give consumers what some call a "nominal limit," which is the credit limit printed on monthly bills. But nearly all allow consumers to exceed that limit by 10 percent or more (precisely how much is a secret), and then charge fees of $30 to $40 for each month the balance exceeds that limit.
In fact, credit limits might better be called "fee triggers." And now, you should think of them as interest rate hike triggers as well. More on that in a moment....
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