Monday, May 18, 2009

Credit Card Changes: Make the Prudent Pay

by Bill McBride on 5/18/2009 11:42:00 PM

From the NY Times: Overhaul Likely for Credit Cards

Banks are expected to look at reviving annual fees, curtailing cash-back and other rewards programs and charging interest immediately on a purchase instead of allowing a grace period of weeks, according to bank officials and trade groups.

“It will be a different business,” said Edward L. Yingling, the chief executive of the American Bankers Association, which has been lobbying Congress for more lenient legislation on behalf of the nation’s biggest banks. “Those that manage their credit well will in some degree subsidize those that have credit problems.”
This seems unlikely (reviving annual fees, charging immediate interest) because of competition. At least I hope it is unlikely!