Imagine getting penalized by your credit-card company for paying your bill, or for not having a high enough balance. Now imagine that your credit-card company tells you it is doing this to test how much you "value" your card.
This is the position some Bank of America and Citigroup cardholders may find themselves in, although Rep. Michael Arcuri, D-Utica, is speaking out against the practice. Arcuri characterized the new fees as gouging, and pointed out that both companies were the beneficiaries of bailout funds from Congress last year.
"The American people have done more than their fair share to rescue our country from this economic downturn, and it is time for these banks to recognize that they are in the business of customer service and are not set up to prey on the consumer but rather to help them succeed," Arcuri wrote in an e-mail sent to The Daily Star on Oct. 30.
While Arcuri is targeting two specific credit-card companies, these practices are not reserved to Bank of America and Citigroup. Other credit-card companies, as well as banks and even 401(k) funds, have come under fire recently for fees that seem designed to prey on consumer ignorance and apathy.
On CNN's series "Nickel and Dimed," which looks at hidden fees and how to avoid them, commentator Gerri Willis highlighted 401(k) fees that can cost users thousands of dollars and spiraling overdraft fees that make an $8 transaction cost more than $100. In late September, Bankrate.com released a study showing that checking-account fees rose to an all-time high in 2009, including bounced-check fees, overdraft fees and ATM surcharges.
Arcuri isn't the only one in the House of Representatives working to bring banks to task for these fees. According to The Associated Press, the House voted Wednesday to approve tougher regulations governing bank fees, credit-card interest rates and other factors. However, the bill may face challenges in the Senate, where some have argued it would make it more difficult for people to obtain lines of credit.
We applaud Arcuri and his colleagues for bringing these matters to light, but we also hope consumers will exceed banks' expectations by not taking these fees lying down. Many banks agree to remove or reduce fees when questioned by account holders.
And if a bank or credit-card company won't budge, the cardholder always has the option of closing the account and taking his business elsewhere. That action can be more powerful than any words, however scathing.
