Credit Card Companies May Raise Annual Fee

Some credit card companies may also begin resetting annual fee policies for cardholders prior to the CARD Act law going into effect. According to creditcards.com, the Credit CARD Act bill does not include any direct comment on annual fee setting.

Annual fees first emerged from certain credit issuers under the term "membership fees." Initially, these fees were justified and were used by companies to profit since holders of some cards pay balances in full each month and carry no interest.

As explained by some financial industry professionals, creditors are scrambling before the deadline because consumer credit scores have decreased and the cost of providing credit has increased.

According to creditcards.com, Mail Monitor, a mail tracking service, reported that in the first quarter of 2009, Americans received 372.4 million card offers. According to the report, approximately 27 percent of those offers carried a fee.

At Credit Answers we strive to educate our clients on what is happening in the industry and ways to help save money in these trying financial times.