Credit Card Industry Leaders Hint of Upcoming Fee and Lending Changes

By Curtis Arnold, CardRatings.com Founder

Bank executives told audiences at recent industry events that pending credit card rules and current economic stress have forced lenders to reinvent themselves. Capital One CFO Gary Perlin told a New York audience that he expected many credit card issuers to restructure their fees. Meanwhile, James Dimon of J.P. Morgan Chase & Co. told attendees at another conference that tighter lending practices would stem further credit card losses.

On a recent conference call, Visa Chairman and CEO Joseph Saunders told investors that many banks will shift their marketing efforts toward profitable initiatives. "I think that our clients are pretty smart about their businesses," said Saunders. "I think they know what they are doing and I think they will promote those things they think will resonate at a particular point in time." Saunders noted that he has already seen his company's clients issue more debit and prepaid payment cards during a period when banks have been reluctant to extend credit.

How do you feel about the new fees and lending changes? We welcome you to share your ideas on our active credit card forum.

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This article was written by Curtis Arnold, a nationally recognized consumer educator and advocate. Curtis has been educating consumers about credit cards since 1998. He is regularly interviewed and quoted by respected members of the national press regarding consumer credit issues. His new book, How YOU Can Profit from Credit Cards: Using Credit to Improve Your Financial Life and Bottom Line is available now! Order online and receive up to a 32% discount.

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CardRatings.com is the most comprehensive source for comparing credit card offers. CardRatings.com is pleased to offer consumers free credit card ratings.

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Please Note! You are welcome to republish this article as long as you state that CardRatings.com is the source for the article. You must also include a link to our website if you republish the article online. Click here for more details about using our articles and thank you for your interest!

Capital One Says, “Create Your Own Credit Card”

By Curtis Arnold, Founder of CardRatings.com


Capital One just came out with Card Lab, a do-it-yourself site, where you can design a credit card that floats your boat. For starters, you have to indicate what your "credit level" is. Then you can pick and choose among basic and additional rewards, interest rates on new purchases and balance transfers, as well as whether or not you want an annual fee.

Your credit level choices are: excellent, above average, needs improvement, and limited history. Capital One defines these categories more generously than I would, but for purposes of coming up with an example I can share with you, I chose "above average," which Capital One defines as:

• I have had a loan or credit card for three years or more
• I have had a credit card with a limit above $5,000
• I have not been more than 60 days late on any credit card, medical bill, or loan payment in the last year

Once you choose your level, you are given an array of choices. Under Basic Rewards, you have to decide if you want 1% or 1.25% back on all purchases -- or would you prefer points or miles on each dollar you charge? Once you make a choice on the basic rewards, various other options change. For example, if you choose 2 miles per dollar charged, many possible additional features immediately disappear. There’s no longer a choice of an introductory APR on new purchases, and you are no longer entitled to choose among additional rewards. Plus, your only option as far as the interest rate is concerned is 16.9% and you must pay a $39 annual fee.

Not too appealing? Fortunately, it’s really easy to start over and see what happens if you make another choice. Choose one mile per dollar charged instead, and you still have lots of other possible benefits to choose – for example, how about a 25% annual bonus? That would entitle you to receive 25% more miles a year, so if you’ve racked up 4,000 miles, you would get an additional 1,000 miles. The card would come with a 0% APR on new purchases until August, 2008, with no annual fee and your choice of a variable rate of 14.9% or 16.9%. (Who would choose 16.9%?!)

It’s easy to play around with the basic and additional rewards options, and you can quickly see what happens if you choose one or another of them, be it double rewards on gas and groceries, double rewards on travel and entertainment, double rewards on all purchases for a year, bonus rewards with every purchase (10 miles, 10 points, or a dime on every purchase), or the 25% bonus I mentioned earlier.

Once you’ve settled on a rewards card, you can choose how it will look. You can go with the original Capital One logo, or you can choose something different – an eagle, flag, tropical sunset, roses, a mountain scene, and more. Once you make that choice, Capital One shows you all your choices and then makes it easy for you to read the fine print.

The Better Your Credit, the More Choices You Have
Say you have excellent credit, which Capital One describes as:

• I have had a loan or credit card for at least 5 years
• I have a credit card with a limit greater than $10,000
• I have NEVER been more than 60 days late on a credit card, medical bill or loan payment
• I have never declared bankruptcy

In this circumstance, you can choose a 0% APR on balance transfers, with a fee ranging from 0 to 2% or 3%. Or perhaps you’d like 6.9% for life on any balance you transfer now.

There are many choices, and looking at what happens when you make one or two of them is fascinating! Take a spin over to Capital One’s Card Lab, and check it out for yourself. Please let us know what you think!

This article was originally published on CreditBloggers.com by Curtis Arnold, a nationally recognized consumer educator and advocate. Curtis has been educating consumers about credit cards since 1998. He is regularly interviewed and quoted by respected members of the national press regarding consumer credit issues. Curtis is currently working on publishing a book about credit card usage with Pearson/Prentice Hall- more details forthcoming!

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CardRatings.com is the most comprehensive source for comparing credit card offers. CardRatings.com is pleased to offer consumers free credit card ratings.

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Please Note! You are welcome to republish this article as long as you state that CardRatings.com is the source for the article. You must also include a link to our website if you republish the article online. Click here for more details about using our articles and thank you for your interest!

Beware of Credit Card Foreign Transaction Fees!

By Heshan Demel, CardRatings.com, Consumer Credit Researcher


Foreign exchange fees on credit cards should be of keen interest to those traveling beyond the borders of the United States. Exchange rates offered by credit cards are usually hard to beat. Of equal and perhaps greater importance, however, is the foreign transaction fee that your credit card bill might show once you have returned home from your trip. This fee, which is often a shock to cardholders, has been increasing as of late. So cardholders that travel overseas extensively need to be aware of foreign transaction fees.

Many travelers now rely on credit cards to pay for overseas travel and purchases. For many consumers, credit cards are easier to keep up with than traveler's checks and they're almost universally accepted now.

Foreign transaction fees charged by credit card issuers will mean you may pay a little extra for that umbrella drink in the Caribbean or that Parisian pastry.

Virtually every credit card assesses an international transaction fee for purchases done outside the 50 states, and that could even include U.S. territories like Puerto Rico and the U. S. Virgin Islands. Visa and MasterCard charge a 1% processing fee and most card-issuing banks add additional fees as well (on top of the 1% fee levied by MasterCard/Visa).

This fee is generally a percentage of the U.S. Dollar value of the transaction. So, even if you paid 100 Euros for a meal that was actually $125.00 (U.S. Dollars), the foreign transaction fees will be assessed on the $125.00 amount.

A March 2007 survey of credit card issuers by CardRatings.com revealed the following foreign transaction fees:

American Express - 2%
Bank of America - 3%
Chase - 3%
Citi Bank - 3%
Washington Mutual - 1%
Wells Fargo - 3%
Capital One - No Foreign Transaction Fee
Discover - Rarely accepted overseas so not part of this list

Despite fee hikes in the past year or so, credit cards are often still the most cost effective payment method for overseas travel, but you should consider fees when planning your trip and budget accordingly.

Update: You maybe entitled to a refund of any Foreign Transaction Fees imposed between Feb 1, 2006 and November 08, 2006. Please refer to www.ccfsettlement.com.

Bon voyage!

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Heshan Demel- Heshan joined the CardRatings.com family in January 07 but has supported them for many years due to his close friendship with its founder. He has a bachelor's degree in finance from Ouachita Baptist University in Arkadelphia, Arkansas and a Master's Degree in Business Administration (MBA) from the University of Arkansas at Little Rock, Arkansas. He has over 9 years of banking experience with Regions Bank where he was a loan analyst. He is a member of the Arkansas Young Professionals Network and enjoys ballroom dancing, travel, and entertaining.

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We welcome your comments about credit card issues in our popular credit forum!

CardRatings.com is the most comprehensive source for comparing credit card offers. CardRatings.com is pleased to offer consumers free credit card ratings.

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Please Note! You are welcome to republish this article as long as you state that CardRatings.com is the source for the article. You must also include a link to our website if you republish the article online. Click here for more details about using our articles and thanks for your interest!

Credit Card Foreign Transaction Fees on the Rise

By Heshan Demel, Consumer Credit Researcher - CardRatings.com


Foreign exchange fees on credit cards should be of keen interest to those traveling beyond the borders of the United States. Exchange rates offered by credit cards are usually hard to beat. Of equal and perhaps greater importance, however, is the foreign transaction fee that your credit card bill might show once you have returned home from your trip. This fee, which is often a shock to cardholders, has been increasing as of late.

Many travelers now rely on credit cards to pay for overseas travel and purchases. For many consumers, credit cards are easier to keep up with than traveler's checks and they're almost universally accepted now.

Despite the convenience associated with using cards out of the country, there are normally costs associated with the convenience. Foreign transaction fees charged by credit card issuers will mean you may pay a little extra for that umbrella drink in the Caribbean or that Parisian pastry.

Virtually every credit card assesses an international transaction fee for purchases done outside the 50 states, and that could even include U.S. territories like Puerto Rico and the U. S. Virgin Islands. Visa and MasterCard charge a 1% processing fee and most card-issuing banks add additional fees as well (on top of the 1% fee levied by MasterCard/Visa).

This fee is generally a percentage of the U.S. Dollar value of the transaction. So, even if you paid 100 Euros for a meal that was actually $125.00 (U.S. Dollars), the foreign transaction fees will be assessed on the $125.00 amount.

A recent CardRatings.com survey of credit card issuers revealed the following foreign transaction fees:

American Express - 2%
Bank of America - 3%
Chase - 3%
Citi Bank - 3%
Washington Mutual - 1%
Wells Fargo - 3%
Capital One - No Foreign Transaction Fee
Discover - Rarely accepted overseas so not part of this list

Despite fee hikes in the past year or so, credit cards are often still the most cost effective payment method for overseas travel, but you should consider fees when planning your trip and budget accordingly. Bon voyage!

We welcome your comments about credit card and other money issues in our popular credit forum!

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Heshan Demel- Heshan is new to the CardRatings.com family but has supported them for many years due to his close friendship with its founder. He has a bachelor's degree in finance from Ouachita Baptist University in Arkadelphia, Arkansas and a Master's Degree in Business Administration (MBA) from the University of Arkansas at Little Rock, Arkansas. He has over 9 years of banking experience with Regions Bank where he was a loan analyst. He is a member of the Arkansas Young Professionals Network and enjoys ballroom dancing, travel, and entertaining.

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CardRatings.com is the most comprehensive source for comparing credit card offers. CardRatings.com is pleased to offer consumers free credit card ratings.

---

Please Note! You are welcome to republish this article as long as you state that CardRatings.com is the source for the article. You must also include a link to our website if you republish the article online.
Click here for more details about using our articles and thanks for your interest!