Not long ago, I received a notice that my credit from Bank of America card was instituting an annual fee. This is something that many people are beginning to see how sending credit card search for ways to raise revenue following the rules of the credit card Act that reduce some of the most infamous practices used in the past to increase revenue. However, some might argue that the annual fee should be considered of interest and should therefore be prohibited in balances, unless certain conditions are met.
Odysseas Papadimitriou, CEO and founder of CardHub.com, believes that adding annual fees to the accounts of good reputation is wrong, and that such fees should be treated as interest rates.
"An annual fee effectively does the same as a position of interest," Papadimitriou said by telephone. "The cost of the debt will be higher in a balance - and not do anything wrong."
Papadimitriou believes that it violates the spirit of the 2009 credit card Act, despite the fact that, technically, the issuers of credit cards which charge annual fees are not violating the law. "They call it a fee instead of an interest rate, but they are positions of the finances of discomfort."
In fact, according to Papadimitriou, an annual fee is a finance charge. "Federal Reserve Regulation z says that an annual fee is a finance charge." "However, it is not the type of interest, issuers can get with this kind of behavior."
"You can call it something else," continued Papadimitriou, "but the end result is the same." It still affects you in your pocket. "It is a backdoor way to increase the cost of debt in a balance."
What can you do?
Papadimitriou encourages consumers to take action. He believes that, with sufficient pressure, it is possible that we could see an end to annual rates - at least on the cards with balances. "Get in touch with offices of protection to the consumer on this practice, which is essentially a switch and bait." "Without balances can simply cancel, but those with a balance of not much use".
Also suggests that contact with their representatives in Congress and even write in the Federal Reserve.
In my position, I could get my annual fee for a year. I was willing to pay the remaining balance and close the credit card, and Bank of America decided to waive the fee. If you are unable to pay the balance of your credit card account, this might work. However, I should perhaps deal with consequences relating to its credit rating.
Those who can not pay their balances quickly have so many options. You have to pay the fee - and hope that write to the Government helps leaders.
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