Fee for NOT using your credit card?

[Ed W]

You say you pay off your credit card balance every month?  Now the companies want to charge you for NOT running up a balance!

http://www.usatoday.com/money/perfi/columnist/block/2009-10-19-bank-of-america-card-fee_N.htm

"Citigroup, meanwhile, has started charging annual fees to card holders who don't put more than a specific amount on their cards, typically $2,400 a year. Other banks are charging inactivity fees if customers don't use their credit cards during a specific period of time. You heard that right: You could be spanked for staying out of debt."

[Townsend]

Well that'd be a deciding factor on closing accounts.

The bank has characterized the fee as experimental.

They can pucker up and kiss my experiment.

[Conan71]

Sure do love my fee-free debit card.

[Hoss]

Sure do love my fee-free debit card.

Same here.

[bokworker]

Keep in mind that closing accounts could have a negative impact on your credit rating. One of the factors, a material one it seems, in calculating your credit score is the percentage of available credit used. As you close accounts the amount of available credit declines which may make your percentage of available credit used go up. I am not saying this is the right way to look at it just that it is the way the major credit scoring companies do look at it.

If you are not anticipating the need for credit, to buy a car or house for example, it may not matter but it could be that doing what seems prudent might cost you as well.

[Conan71]

And since insurance company actuaries see fit to extrapolate your credit file into your risks for auto accidents that could be another way that it costs you in higher auto premiums, then.  I personally think it's total BS.

[FOTD]

Sure do love my fee-free debit card.

Yes, but this week's Business Week sez those daze are numbered too.

Hate to burst your bubble...

[Conan71]

Yes, but this week's Business Week sez those daze are numbered too.

Hate to burst your bubble...

I'm sure the daze of free checking are numbered too.  I don't write hot checks which means my primary bank isn't profiting heavily off me.

[bokworker]

In general "non-interest income" is very important to banks. The recent changes announced concerning overdraft fees, which were egregious, means that banks will look for other areas to replace this lost income (for the indusry overall the amount is in the billions per year). With interest rates so low the fact that you will accept no interest on your "free" checking account means they are not as profitable as they were when rates were higher. I would agree that additional fees are coming.

Additionally, the move afoot to more tightly regulate the financial industry will result in consumers paying fees for many services they used to receive for "free".

[Townsend]

Keep in mind that closing accounts could have a negative impact on your credit rating.

How much open credit does a person really need though?

How many open unused lines of credit should a person maintain?

[Wilbur]

First of all, there is no worse bank then Bank of America.  They are very well known for the amount of their excessive fees.  I mistakenly had an IRA that, through several bank sales/purchases, ended up at Bank of America.  They fee'd me to death.  I finally transferred my IRA someplace else, which of course, was another fee.  A letter sent to Bank of America went unanswered.  All their crazy fees wiped out much of the earnings my IRA made.

Even Clark Howard says Bank of America is the absolute worst.

www.bankofamericasucks.com is always a great site to visit.

[bokworker]

How much open credit does a person really need though?

How many open unused lines of credit should a person maintain?

I don't think there is a black and white answer to these questions. I have had credit specialists within my organization try to explain the scoring process to me. Now I will admit I am not the sharpest knife in the drawer but I knew less after talking to them than before. It is also true that at some point too much available credit starts to become a negative.

Making sure you responsibly handle credit over time is the best way to assure a good credit score. And as Conan mentioned, your credit score can impact many parts of your finances that are not directly tied to the repayment of debt.

[custosnox]

First of all, there is no worse bank then Bank of America.  They are very well known for the amount of their excessive fees.  I mistakenly had an IRA that, through several bank sales/purchases, ended up at Bank of America.  They fee'd me to death.  I finally transferred my IRA someplace else, which of course, was another fee.  A letter sent to Bank of America went unanswered.  All their crazy fees wiped out much of the earnings my IRA made.

Even Clark Howard says Bank of America is the absolute worst.

www.bankofamericasucks.com is always a great site to visit.

BOA got me when they charged a fee for cashing their own checks.

[bokworker]

BOA got me when they charged a fee for cashing their own checks.

You must have been a "non account holder" and they needed to compensate for the risk the check would not clear.....

/sarcasm off

[godboko71]

In general "non-interest income" is very important to banks. The recent changes announced concerning overdraft fees, which were egregious, means that banks will look for other areas to replace this lost income (for the indusry overall the amount is in the billions per year). With interest rates so low the fact that you will accept no interest on your "free" checking account means they are not as profitable as they were when rates were higher. I would agree that additional fees are coming.

Additionally, the move afoot to more tightly regulate the financial industry will result in consumers paying fees for many services they used to receive for "free".

Maybe if banks had fewer but better staffed locations there costs would go down, less real estate to pay for, over all less employees, all equaling a higher return per customer without having to increase fees. Another benefit most consumers would see with fewer locations is faster better service, because with fewer locations to staff they could be staffed with not only more employees but also with higher quality employees (when you decrees the over all amount of available positions, have less management spread around you can find better prospects.)   

Never going to happen but if it did it would all save us money and we could potentially get better service, but who wants that.