Survey Finds Credit Card Companies Raising Fees
Consumer Action (CA), a San Francisco, CA-based education and advocacy organization, recently released  the results of its annual credit card survey, which examined the rates and terms of 143 cards from 47 banks.
CA found that in the last year, nine banks, including Bank of America and Bank One, had implemented a new late payment fee for some of their credit cards. The banks now use a tiered late payment system, which charges higher late fees to customers with higher balances. The organization also found that the number of banks charging a $35 late fee had doubled from last year with late fees ranging from $10 to $38 for an average of $27.
The survey also found that 39 percent of issuers will raise a customer’s interest rate if a credit report shows slipups with other creditors, a practice that Linda Sherry, CA’s editorial director, calls "grossly unfair." Two banks, Bank of America and Fidelity National Bank, say that they wouldn’t raise an existing customer’s rate because of a credit problem but they might lower the customer’s credit limit.
In addition, a growing number of Visa and MasterCard issuers are tacking on a currency conversion fee, of 1 or 2 percent, on foreign transactions. The fee comes on top of the existing 1 percent charge. Citibank started the practice in 1998 and USA Bank adopted the new fee structure last spring.