Does Your Credit Card Issuer Consider You a “Deadbeat?”
You pay every credit card bill in full each month. You’ve never gone over limit, so you’ve never incurred an over-limit fee. You’ve never paid late, so you’ve never paid a credit card late fee. Your credit rating is excellent.
And guess what? In the eyes of your credit card issuer, that makes you a “Deadbeat.”
You’re someone who is using their services without paying for them, so you are not a profit source. You’re even worse if you use a reward cards and get your 1 or 2% back!
Before you start feeling guilty and deciding you should carry a balance for a month or two, don’t. Remember that the business that took your credit card in payment for goods or services did pay a fee for the privilege of offering this service to its customers.
The unfortunate thing is that credit card “deadbeats” may be tapped to make up for losses in profits stemming from the “Credit Cardholder’s Bill of Rights.” And these losses will be significant.
For instance, experts estimate that the prohibition on raising interest rates on existing balances will cause the issuers to lose $10 billion per year. And that’s just one of the new rules.
Financial experts are also predicting that credit card issuers will come up with changes that weren’t addressed in the legislation. For instance, they may begin to routinely charge annual fees – even to their best customers. They may also raise interest rates across the board, add or increase fees, lower credit limits, and either eliminate or reduce benefits on reward cards.
They may also phase out the grace periods. Right now you can charge purchases on your credit card from the first day of the billing period to the last and you won’t pay interest on those charges if you pay the bill in full before the due date. This could change in the near future.
Experts are also advising all consumers to keep their balances low, spend their rewards credits, and keep all credit card accounts open by charging a small amount at least once per quarter. The more available and unused credit you have, the better your credit rating, so if you can get your credit limits increased, do so.
One thing is certain, credit card issuers will be doing all they can to make profit-building changes before the new laws go into effect. That’s why it’s so important that you read all the mail that comes from your credit card issuer.
