Some credit card industry observers are asked to predict what’s in store for plastic with the new year and new legislation.
If the predictions are correct, rate hikes will slow (jacking them up higher would be bad for business), and fixed rate cards will all but disappear (there aren’t that many in existence right now). Also, fees: Expect more of them, and for them to be more expensive.
“Currently, only about 20% of the credit cards have annual fees,” Hardekopf said, “but we are seeing more and more cards introduced with an annual fee. And we are seeing issuers like Bank of America assess an annual fee of $29 to $99 on some of their existing customers.”
He also expects increases in existing fees. For example, balance transfer fees have been increased from an industry standard of 3% to 4% (Bank of America) and even 5% (Discover), Hardekopf thinks more issuers will follow. Cash advance and foreign transaction fees could continue to go up as well.
New fees may also be added to cards. “We’ve seen inactive fees added by some issuers where you get assessed a fee if your card has no activity for 12 months or, in some cases, if you don’t purchase a certain amount on that card over a 12-month period,” Hardekopf added. He’s also seen $1 “processing fees” added by an issuer for a paper statement.