Credit card companies can raise fees - | WBTV Charlotte

Credit card companies can raise fees

CHARLOTTE, NC (WBTV) - The Consumer Financial Protection Bureau says it will abandon a rule that limited big up front fees on credit cards.

When people heard the news, it really upset them.

"That's a big concern to me. A big concern. That's not a good thing at all," said Nicole Brown.

She said she learned her lesson when the economy crashed: "only use your credit card when absolutely necessary."  And she thought the government...and big banks...had learned a thing or two too.

Consumers felt vindicated and safer when the Obama Administration created a watchdog agency to keep credit card companies from over-charging their customers.

Now that feeling is gone, Brown says."Some of those fees are just astronomical and I just don't want to go through that again."

Judging from the reaction we got, there will be backlash.

But some financial experts say the new agency is simply learning to pick its battles.

Banks fought back when it tried to limit credit card fees totaling more than 25 percent of a person's credit limit in the first year that account exists. Now, they are allowed to charge whatever they want as long as they do it up front...before the card is activated.

Those fees can include processing or activation charges of over a hundred bucks.

Lenders may start to see another exodus of customers, but banks and credit card companies say they need the freedom to make enough money to continue offering loans in the first place.

 

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