Credit Cards Online Information

Surprise credit card fees are on the rise.

Today's most popular credit cards come appealingly dressed, with tantalizing rebates and single-digit interest rates. But, like the wolf in Little Red Riding Hood, what lurks beneath can bite unexpectedly. "Gotcha" fees--the ones disclosed in microscopic print in your customer agreement--are getting both more frequent and more expensive.

Many card issuers reported sharp increases in 1998 fee income. MBNA collected $831 million in noninterest revenue in 1998, compared with $692 million in 1997--a 20% increase--and Providian Financial Corp. reported a phenomenal 120% increase.

Late fees, especially, are creeping up on unsuspecting cardholders. That's because many issuers have done away with a grace period of up to 15 days before a payment is late enough to trigger a fee. Now you may be charged a late fee if your payment arrives even one day after the due date (see "Q&A," on page 72). The average late fee has jumped 56% in two years to $22.10.

CONVENIENCE AT A PRICE. Convenience checks are another source of stealth fees. Wuping Chang of Ventura, Cal., used one to transfer $15,000 from a 9% personal line of credit to a First USA Bank Platinum Visa charging 3.9% interest. Chang was aghast to see a $450 transaction charge on his first statement in November--the result of a brand-new 3% fee on balance transfers. Since then, First USA has capped the fee at $50.

VANISHING BARGAINS. The low interest rate that attracted you to a card can disappear, too. Howard Weisser of Old Bridge, N.J., lost his 8.5% interest rate with Huntington Bank when his card was sold to Direct Merchants Credit Card Bank in Arizona. Weisser learned about the switch when his first bill arrived from Direct Merchants--with an interest rate of 17.4% and a $50 annual fee already charged to his account. "They claim they sent me notification. I never received it," Weisser says. Such notices are often tucked in with your bill and are easily overlooked.

Huntington sold the accounts of cardholders outside of the states where it has branches. We still list its cards among the best low-rate cards (see below) because it still issues cards to residents in all states. But there's no guarantee that it--or any other bank--won't sell your card.

Best Deals in Credit Cards

# posted by Medical Information : 3:44 AM