Credit CARD Act doesn't prevent new fees

So-called 'maintenance' fees aren't regulated

The Credit Guy columnist Todd Ossenfort
Todd Ossenfort has been chief operating officer for Pioneer Credit Counseling since 1998. He writes our weekly "The Credit Guy" column, answering reader questions about credit counseling and debt issues.

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Question for the expert

Dear Credit Guy,
Can a credit card company change your annual fee from $50 a year to $15 a month and call it a maintenance fee? -- PamAnswer for the expert

Dear Pam,
Unfortunately, while the the Credit CARD Act of 2009 regulates some fees charged by card issuers, such as late fees or over-the-limit fees, but does not restrict card issuers from setting and charging additional fees.

As an example, many card issuers had phased out annual fees from many types of accounts, but the annual fee is making a big comeback with many issuers post-CARD Act. In addition, many card issuers, such as yours, are charging fees on accounts and calling them maintenance fees. Profitability for banks issuing credit cards is getting tougher and tougher, and they are trying to generate more revenue with fees.

The basics on fees and the CARD Act are listed below:

Fees prohibited:

  • Inactivity.
  • Closed account.
  • Multiple fees for one transaction (you cannot be charged both a returned payment fee and a late payment fee for a bounced check payment).

Fees regulated:

Fees not considered:

  • Balance transfer.
  • Cash advance.
  • Foreign transaction.
  • Annual or other fees for issuance or availability of credit (a maintenance fee would fall under this category).
  • Insurance.
  • Expedited payment.
  • Optional services.
  • Reissue a lost or stolen card.

So, the answer to your question is, unfortunately, yes. Credit card companies may change the terms of a cardholder agreement and begin charging you a monthly maintenance fee of $15 per month. Some other changes that card issuers have been making that you might watch out for include increasing minimum payments, decreasing credit limits and closing accounts.

My suggestion for you and other readers wondering what to do about changes in their current cardholder agreements is to sit tight for now and see how everything settles out after all the final provisions of the CARD Act become effective August 22, 2010. The credit market has tightened quite a bit, but persons with good to excellent credit ratings are still going to be sought after by card issuers. I predict that competition will have issuers offering cards with amenable terms and fees in the very near future.

One last thought -- should one of your card issuers make a change that will cost you more than you can afford, by all means move the balance to a different card that has more desirable terms.

Take care of your credit!

See related: A guide to the Credit Card ACT of 2009, 6 credit card fees you might not know about, Study: Credit card annual fees most hated

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Updated: 03-24-2019