Do you think CC companies will actually charge annual fees and instant interest?

[FicoPower]

Perhaps it is just media scare tactics, but as you know a law was passed recently for credit card companies to stop raising interest rates and huge fees for people who are late or have a high balance, so the media now says that to make up for this CC companies will begin charging annual fees for all credit cards even for people who have good credit.  They also say that interest will be applied at the same time of purchase instead of paying it in full at the end of the month to avoid the interest fees.  What do you think?  To be honest, I am surprised that credit cards haven't had these types of rules the whole time, and if they do come into play, I may stop using my cards and cancel the ones if they begin to charge yearly fees. 

[Anonymous]

I'm pretty sure that removing the grace period would kill the credit card business, at least with those 40% of credit card users that always pay in full. For those that carry balances, it wouldn't matter. Even though such a move would look like increasing income, I'm not sure whether just keeping the riskier customers and sending those people who always pay away is a smart business move. This means I don't expect this to happen.

On the other hand, the return of annual fees would probably bring the PIF crowd to close most of their accounts. Again, I don't think stores that want to instill brand loyalty would see this as a smart move. I can see this happen more with rewards cards, to make them worthwhile only for people who use them much. But there are already moves into that direction (see Chase).

In general, I saw these comments mostly as scare tactics. Yes, we might see some of this happen. As a general rule though, that would be suicide for the credit card companies.

[Anonymous]

Also think removing the grace period will kill their business. I pay every bill in full and for sure when I'm on a long business trip and have a $15,000 statement I'm not willing to pay them $200 or more interest for using the card.

[FretlessMayhem]

The money they would lose from merchant fees from the 42 percent of PIF'ers would be greater than the money they would generate by charging interest on day 1, so I don't see it happening.

[moondog7324]

I bet you will see some of the CC companies try it. I suspect the CRAP1's HSBC and First Premier will do it. They always take advantage of thier users. I would bet that Bank branded and CU CCs will not be effected.

As long as Joe Biden is VP anything is possible- there was an old saying in Delaware that Joe Biden was MBNA's most productive employee.