Bankers vow revenge. What's next?
It’s not a good time to be a banker these days. Not only do you have to worry about populous anger and increased government regulations, but you also have to turnaround declining profits.
How do you cope? Well, you go back to the drawing board, the place where late fees and over-the-limit fees originated. You call up your close friends and consultants—the brilliant numerati—who invented those deceptive, introductory-rate offers? In short, you create a new animal, a fresh scheme that will allow you to restore record profits and happy shareholders.
As President Obama prepares to sign bold legislation that will restrict credit card practices, bankers are already threatening to milk their best customers for more money. The cry goes something like this: If we can’t penalize the bad guys, we’ll get the good guys. It reminds me of a superhero gone bad type story.
Anyway, I’d like to know what you think. In addition to targeting good customers, what other new tactics will we see over the next few months, especially when pending legislation becomes law?
Greetings! I’m Kevin D. Johnson, a small business owner who has recently assumed the role of consumer advocate and internet activist. Atlanta, Georgia is my home.
Upon returning from my wonderful honeymoon in Jamaica last October, I received what I thought was an ordinary American Express bill, but to my surprise it was a disappointing letter informing me that my credit line was reduced by about 65% for a highly suspicious and discriminatory reason. Considering my excellent credit score and pristine payment history, it just didn’t make sense. However, what does make sense are the unfair and insidious policies that I have uncovered when asking why. It is time to change them.
I created this web site to document and share my challenging journey to change what is wrong, unfair, and unjust in the credit card industry. The ultimate goal of this web site is to inform consumers of ways to stand up for themselves against treacherous business practices and to educate consumers about how to improve their credit. Finally, I hope to encourage a more open dialogue with credit card companies about their policies–good and bad.
I had this credit card for years and pay on time but when I brought a new car i get a letter in the mail that they cancel my credit card. I had no advance notice or reason why they just did it so I am paying back the money but i have no credit card.
Posted by: anthony | May 21, 2009 at 08:19 PM
What WOULD be a best practice plan of action for credit card companies? Consider what they need to do to make a profit--what is best for the company, what is best for the country, and what is best for the consumer. Surely, there is common ground among those three entities. At this point it looks like each sees the other at least as an enemy,maybe even a sucker. I can't see how that will be productive in the long haul.
I'm an ordinary citizen, certainly not a business person, so my question may be incredibly naive.
Posted by: Sharon Barlow | May 21, 2009 at 10:42 AM
Great points, Eric. I definitely think that grace periods will either get shorter or will disappear altogether. And, of course, the formulas to calculate interest will change, becoming perhaps more complicated and slick.
Posted by: Kevin D. Johnson | May 21, 2009 at 06:51 AM
What might be coming:
1. Annual fees for EVERYONE.....
2. A fee for each purchase....
3. Interest charges beginning at the moment of purchase...
4. Fees to access yourr CC account online after exceeding some arbitrary FREE number...
5. Fees to talk to a LIVE person...even though this is to be forbidden in the bill..."talk for FREE?" the CCC's say.....
6. YOUR IDEA HERE>>>>>>>>>>>>>>>>>
In 1980 my banker, who went on to be a special assistant to the governor of the state in which I was then residing, said that in the future banks would make a fortune charging fees for their then free services....BOY..was he right !!
Posted by: Eric Johnston | May 21, 2009 at 05:44 AM
Well, I am eager to see how things will turn out. I will give it some more thought and see if I can come up with some likely scenarios for you all to check in on. It's not a matter of what, but a matter of when.
Posted by: Kevin D. Johnson | May 20, 2009 at 04:10 PM
Their lack of ethics got us into the whole financial mess and I don't think they are any more ethical now then they were a year ago. I'm sure they will come up with something injurious to inflict on their customers. It will take me a while to pay off my credit card debt and when that happens there will be NO MORE.
Posted by: Sharon Barlow | May 20, 2009 at 03:34 PM
All the bankers are doing is continuing what they began to do back last October when they went nuts and began treating their best customers like crap!
What they seem to be forgetting is that what banks do to make money is to lend money and eventually if they keep this up no one will be borrowing money!
Talk about having their heads up their butts (can I say that here?)
Posted by: SoFlaSteve | May 20, 2009 at 02:13 PM
I think they may be angry and obviously they have no sense as to the anger they have inspired in consumers. If they want to punish good borrowers , what you can see down the line are class action lawsuits for disparate treatment . Some of those good clients will be attorneys and oops, thats a line those banks will be "angry" enough to cross. They dont ever want a case to get in to court in this country --ever again. They have crossed lines
that are irreparable. They should be lowering rates for consumers and rewarding them . I am going down to be sure I am signed up for jury duty today!!
Posted by: Teresa Simmons | May 20, 2009 at 12:38 PM
I agree with Jason. I've been paying down my credit cards so I can get rid of them. I refuse to be beholden to these banks.
Posted by: Carole May | May 20, 2009 at 09:24 AM
I hate to be Debbie Downer, but I think it is just going to get worse. I can tell by their words that bankers are mad. Like you said, Kev, bankers are going to raise everyone’s rates over the next few months and come up with a new beast. Hmmm. What will the beast look like? I do not know, but I think it will be even worse. Start saving up your cash and start paying by check.
Posted by: Jason Allen | May 20, 2009 at 06:06 AM