As credit card holders play it safe, issuers increase non-penalty service fees

Ylan Q. Mui
Washington Post
July 27, 2010

• A d v e r t i s e m e n t

After the recession forced credit card companies to purge their rosters of the riskiest loans, the industry is facing a new problem: customers who are too good.

Card issuers have long found their bread and butter in penalty fees and high interest rates paid by consumers who carry a balance. But that business model has been upended by the legions of consumers who were overwhelmed by debt when the recession hit, forcing the industry to write off billions of dollars in loans. In addition, new federal laws limit how much card companies can charge risky customers.

Now, frugal-minded consumers are charging less on their credit cards, paying down their balances and steering clear of penalty fees — steps that are financially responsible but have the industry scrambling to find new ways to make money.

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This article was posted: Tuesday, July 27, 2010 at 10:44 am

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