Credit Card Companies Cut Unfair Fee

August 12, 2009

credit cardsBy Angie Moreschi:

One small step for consumers.  Two credit card companies announced they are going to drop penalty fees for charging over your credit limit.  American Express and Discover have decided to be pro-active in throwing this bone to its customers.

A new law set to take effect next year would force them to do this anyway, but you’ve got to give them credit for moving forward early, especially since it was such a money maker. USA Today reports credit card companies are expected to make $3.7 billion from over credit limit fees this year. That’s up 16 percent from last year.

The whole concept of charging customers for going over their credit limit, instead of just denying the charge is pretty unseamly to begin with, but at least we’re now beginning to see a reversal in some of the most unfair consumer practices of recent years. Let’s hope the trend continues.

Both Discover Card and American Express say they plan to stop charging fees when consumers accidently spend go over their credit limit. The new law only allows fees to be imposed if a consumer says they want the ability to charge more than their credit limit – which would happen rarely at best.

If you go over your credit card limit, American Express and Discover say they use computer programs to decide if they will allow you to splurge, or will cut you off immediately.

Of course, don’t celebrate too soon.  Analysts say credit companies may replace the credit limit fees with other charges.