They should read this story from USA Today. Banks are going to start charging fees to people for paying their credit card bills on time. Crazy, right? Why would they do that?
These fees are the credit card industry's response to credit card legislation that will, among other things, restrict credit card issuers' ability to raise interest rates on existing balances. Credit card issuers are looking for ways to raise income before the new rules take effect in February. During the first quarter, 27% of credit card offers included annual fees, up from 18% a year earlier, according to Synovate Mail Monitor, a credit card direct-mail tracking service.
Curtis Arnold, founder of CardRatings.com, says he expected credit card issuers to raise annual fees after the legislation was enacted. What he didn't expect, he says, "was that good customers were going to be hit."
Among the many problems with regulations is unintended consequences. In this case, Congress passed a bill to "help" credit card users which has, in short order, hurt those users who are most responsible.
Increasing regulation is like trying to change the path of a river; the water's going to go where it wants to go.
(h/t the invaluable Cafe Hayek)
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