As Credit Card Holders Play It Safe, Issuers Increase Non-Penalty Service Fees

Publication: The Washington Post

Author: Ylan Q. Mui

07/22/2010 - After the recession forced credit card companies to purge their rosters of the riskiest loans, the industry is facing a new problem: customers who are too good.

Card issuers have long found their bread and butter in penalty fees and high interest rates paid by consumers who carry a balance. But that business model has been upended by the legions of consumers who were overwhelmed by debt when the recession hit, forcing the industry to write off billions of dollars in loans. In addition, new federal laws limit how much card companies can charge risky customers.


A new study by the Pew Charitable Trusts found that annual fees and service fees have increased over the past year while penalty charges -- which are subject to the new federal regulations -- remained largely unchanged. Meanwhile, some cards are encouraging customers to charge more by offering enhanced rewards, allowing the issuer to capture "swipe fees" paid by merchants. And one issuer even allegedly threatened to reject consumers with high credit scores because they didn't boost the bottom line.

Read the entire article As Credit Card Holders Play It Safe, Issuers Increase Non-Penalty Service Fees on The Washington Post Web site.

Pew is no longer active in this line of work, but for more information visit the Safe Credit Cards Project on

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