January 26, 2007

penalty for being responsible

Just read this article about how some in the credit card industry think "deadbeats" should pay an annual fee. Now, the deadbeats they're referring to aren't those that don't pay -- they're talking about people who pay their balances in full each and every month. The credit card companies make very little money from those people (a group in which I belong), and according to some (some crazies I call them), its the delinquents and/or those who carry balances month to month who subsidize the deadbeats.

Obviously, I'm not in favor of any fee being put on me for being fiscally responsible. To lay blame on people who manage to spend what they can afford is ridiculous. If those people get their way though, I wonder what people would do. My initial reaction was, I'd just stop using credit cards. However, the reality will probably depend on the type of rewards I get for whatever card I choose to stay with. Still, I much prefer the current situation now.


TFB said...

Don't worry, it won't happen. First, set the record straight, the idea of asking you to pay an annual fee came from "one consumer advocate," not the credit card industry. Second, the industry is OK with "deadbeats" because deadbeats make up 1/2 of their customer base and generate 30% of their revenue. These stats are in that article. That 30% revenue is easy money. No bad debt writeoffs, low customer service costs, low cost of funding.

Angela said...

i'm a deadbeat and i'm damn proud. if they charged me a fee, i'd go to cash like all those chinese folks. i may lose out on cash back opportunities, but if i stick to asian stores i can save 8.375% on nyc tax.