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Fee-weary consumers to banks: We’ll see you in court

Jeremy Simon

Banks in the United States have certainly had a rough year, amid a slew of high-profile failures, scrutiny from regulators and those angry torch-bearing borrowers congregating outside CEO castles. But some experts predict that domestic lenders could take even more heat, based on what has been already happening to credit card issuers overseas.

In the United Kingdom, for example, “Hundreds of thousands of customers have tried to reclaim the overdraft fees they have been charged, on the grounds that they were unfair and therefore illegal,” BBC News reports. “In 2007 the UK’s banks refunded about £784m to nearly 378,000 customers.”

With the CARD Act set to limit the money U.S. banks can earn from interest rates, lenders will need to make up for lost APR income using penalty fees — and that could inspire even greater anger toward card issuers. If that prediction proves true, some analysts say that U.S. banks could also find themselves in court, forced to justify their fee-based income to both consumers and Congress.

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  • Jeremy –
    Have been looking through your blog posts – how about doing something on whether or not you should pay for doctors’ visits with a credit card? I have been using (yes I do work with them too) to find out the price I should be paying for healthcare treatments and services but I believe that when I pay by credit card there are extra fees that offset my savings. Would I do better to pay with cash?

  • Shelly Reed

    Just moved recently. When my mail finally caught up with me I recieved a notice from Citibank stating that since I missed a payment my interest rate would now be 29%. I have called them twice, and gotten no where. Any suggestions?

  • @ Aimee — Thanks for the suggestion. You might be interested in the following article by Connie Prater:
    @ Shelly — Unfortunately, in the current economy, banks are getting really tough with cardholders who miss payments. You may want to see if you can pay off the existing balance at your old rate, although you won’t be able to make any new purchases on the card.

  • tim

    citi after 20 years and not missing a payment and being late perhapes 3 times in the past 5 years and no more than 3 days max past due date has all so informed me that my interst rate will increse to 29% which is more than two times what it is now so in late november i will opt out of citi and close my accout with them pay off my balance at my current rate a never do bussines again with them. So fight to get them to close your account at your old interst rate pay it off and move on

  • Stew Smith

    I have heard that some cards charge fees for overpayment of a minimum monthly amount. Can you direct me to lenders who are doing this? I overpay to get out of debt so if I am getting a fee charged and that fee is being called “interest” I would like to know about it. Any help?