Apparently once again this year the spotlight is on lawmakers grilling credit card execs from major card issuers such as Chase, Citi, Bank of America, and Capital One.  Article can be read here.

Why is it that people are surprised?  More shocking is that I don’t understand what people expect as a long term outcome of these inquisitions.

Pricing in the credit card market is a cyclical affair.  Credit card companies and banks are pros at literally applying lending laws and creatively using credit bureau and transaction data to make a case for price gouging.  They increasing push the envelope on fees and pricing until someone pushes back.  Then they “do the right thing” by eliminating the fees.  Do we really think that they are giving up revenue for the sake of PR and the customer?  No friggin way.  They find other ways to extract the money.

When late payments and over credit line fees were being questioned, banks reduced the fees then were sneaky enough to apply the current tiered rate system that punishes those that are more severely over limit.

Now they are questioning proactive rate and fee increases that credit card companies use to predict bad performing customers.  There is a lot of predictability to this data and can save and make the bank a boatload of money.  However, if cardholders are required to uphold the cardholder agreement, then so should banks and live up to their promise without creative ways to extort money.

Why don’t we all just give it back to them?  Let’s take our next cardholder agreement, cross a bunch of stuff out and mail it back to the issuer saying we impulsively decided to change the agreement to our benefit?  Isn’t this the same thing?

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