Quote:
Originally Posted by Chrysalis
If fees are illegal full stop then why were the credit card fees reduced instead of removed.
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The fee is not illegal per-say, but if all they have done in the first instance is print some extra text on your next month bill reminding you that your account is 30 days overdue then how much has this cost. It has not cost more paper, it has not cost more postage, all it has cost is the programming development time to add and thest that if / then loop to the statement rendering application.
If they are sending out additional reminder letters then there are directly calculable production costs, of paper envelopes, toner postage, but this is probably printed on surplus statement rendering capacity so is there a cost of buying more printing and distribution capabilitlity that they can allocate as a fixed cost - probably not, but there are the staff and cost per unit maintainance.
Then there is the team of bodies that call up etc, that probably costs more money and can directly be attributed to late payers, but they do not kick in on day one, probably nearer day 60.
I would see the 30 day late fee dropping considerably, along with the interest rate on the card escalation (common in the US) as you are now considered a higher risk. So they will claw back the loss of the 'penalty fee' by increasing your interest charge (and you can bet that increase will be more).
I can also see that as the account becomes more delinquent, the fees will increase as the bank can justify that now the letters and the call center is calling the account holder.
My
