The situation is now tightening for credit card providers. The regulations of the CARD Act have actually limited the sources of profit for credit card providers. To cope with the situation and to avoid being eliminated from the industry, banks and credit card issuers are faced with the challenge of creating new ways on how they can make profit.
Maybe business minded people really never run out of ideas on how to create a source of profit. Today banks and credit card issuers found credit card fees to be another area that has a good potential to create more income for the company.
Some of the rather obscure types of credit card fees that consumers are now being charged with include foreign transaction fees. This as the name suggests is the amount paid for the service of making transactions with a foreign bank. This fee was previously called currency conversion fees since it is covering the costs of converting foreign transaction to US dollars. However it has adopted a new name today .since it is still charged even if the transaction was made using US dollars. Foreign transactions fees normally cost a percent to 3 of the actual charge.
Another interesting type of fee credit card companies invented is the activity fee. This is the new version of the CARD Act restricted inactivity fees. Banks and other credit card issuers would say that this fee is for them to ensure that consumers use their cards. This activity fee can cost consumers $50 up to $100 per year.
Another is the payment protection fee. This type of fee as according to banks and other credit card issuers is the monthly fee that provides the minimum payment moreover suspends charges the moment the card holder experienced illness or unemployment. This costs consumers eighty cents to a dollar for every $100 spent or carried balance.
Lastly we have the paper statement fees. The name itself does not sound convincingly justified to be paid by consumers however it is a legitimate fee used by credit cad issuers. This fee which costs a dollar a month is designed to pay for the expenses shouldered by the credit card company in printing and mailing credit card statements of card holders.
These are just some of the ways fees can be dressed and re-dressed by credit card companies to have legitimate sources of profitability. In case another law would try to eliminate these vague looking and sounding types of fees there is no doubt banks and credit card companies will create new batches.
