I don't know quite how I feel about some of the proposed new credit card regulations floating around. But, since the government already regulates the banks to some extent, here would be my credit card regulation proposal:
Banks shouldn't be able to levy penalties for non- payment of an annual fee, as they do for missing a monthly payment. If you don't pay the annual fee, they can freeze the card so you can't use it but they can't charge penalties.
I used to carry a number of credit cards years ago, although I only used one or two of them regularly. I didn't pay annual fees on any of them, either. Then, one year, I got a bill from Capitol One (I believe it was). Nothing was due but an $18.00 annual fee.
I'd never had to pay that fee before and called them up asking them to close the account. I told the guy on the phone I don't pay annual fees on any of my other cards and I wasn't going to pay one for their card. As I expected, he said, Annual fees are always negotiable with us. We'll take that off your bill right away....
So, next year, the same thing happens. I get another bill for $18.00. I didn't feel like calling them at that moment so put it off. And kept putting it off, despite the bill sitting right next to the phone all that time. You snooze, you lose.
A month later I still hadn't called to get rid of that fee and I get another bill from Capitol One. This time it's for $68.00- the annual fee plus a $50.00 penalty for not making a monthly payment. Keep in mind I didn't have a balance on that card until they added the annual fee. Now I definitely had to call them, which I did.
I tell the gal I wanted to close my account. She says I can't because it has a balance. I explained that was because of the annual fee which I hadn't paid. She told me she still couldn't close it until the balance was paid but she'd flag the account for closing as soon as they received payment for the balance.
In hindsight I guess I should of asked to talk to someone higher up the line, although I wasn't really approaching them from a position of strength since I already told them I wanted to close the account. I probably should of brought up the annual fee first and then maybe they would of dropped the charges.
As it was, I ended up paying them $68.00 for basically nothing. It wouldn't bother this libertarian if they made that sort of thing against the law.
Labels: banking regulation, credit cards