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Attention~Credt Card Users~What's your fall-bacvk Plan?
Old 10-29-2009, 04:19 PM   #1
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Attention~Credt Card Users~What's your fall-bacvk Plan?

OK most of us here have been abusing the credit card system for many years and racking up the cashback bonuses and air miles as well as taking advantage of a system that allows you top buy today and pay the bill with no interest in as much as a couple of months from now. I kinda' agree with what's below, so what's my plan when this happens?

Since my bank (USAA) pays out a bonus for every debit card transaction, that's probably what I'll do and ditch my CC, as I refuse pay a fee. Of course, this assumes that my bank will continue to have perks for using the DC.

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You floss regularly, yield to oncoming traffic and use your credit cards judiciously, dutifully paying off your balance every month.
You may believe that your exemplary behavior shields you from unexpected credit card fees.

Sadly, that is no longer the case.
Starting next year, Bank of America will charge a small number of customers an annual fee, ranging from $29 to $99. The bank has characterized the fee as experimental. But card holders who have never carried a balance or paid late fees could be among those affected.
Latest bank fee is for paying off credit card on time every month - USATODAY.com
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Old 10-29-2009, 04:23 PM   #2
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Any card that imposes a fee on us will have a date with my shredder. I suspect I have the same USAA deal as you do -- a debit card that pays 0.5% cash back on signature-based transactions (not PIN-based). I noticed also that the air travel rewards on my USAA Amex are being watered down starting in April, but fortunately the cash back rewards haven't changed (though I usually use my Schwab Visa now with the 2% cash back reward).
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Old 10-29-2009, 04:53 PM   #3
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I've been watching for this to happen with my National City (now owned by PNC, whoever they are) cashback card. They raised the overall interest rates (big wooooooo ) but I'm holding my ground.
I just checked - the APR is still listed at 19.24% as of end of Sept. No sign of an annual fee yet.
This particular card is no longer available in my area, but they haven't cancelled me yet. Ssssshhhhhhhh.
I pay the balance off twice a month as our paydays alternate, so zero interest is paid. I get a check for anywhere between $110-$125 every 3 months.
4% is still paid for gasoline and automotive purchases, 2% on groceries.
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Old 10-29-2009, 05:00 PM   #4
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If my card starts charging an annual fee, I will shop elsewhere for another with the same benifits.
If I can't find one, I will consider how much cash back I get and compare it with the amount of the annual fee. If the annual fee is more than half of what I get back, I will cancel the card.
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Old 10-29-2009, 05:05 PM   #5
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Unless every card out there imposes a fee, I'll just hop to a new one. I guess I'll have to cancel the old ones to avoid the fee, which won't do my credit rating much good. But I refuse to pay a fee. My credit rating is good enough to absorb the hit, plus I don't really need any loans anyway. If worse comes to worst, I'll go back to cash. As long as the rules are in my favor I'll play the game, but whenthey change the rules I'm taking my ball and going home.
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Old 10-29-2009, 05:07 PM   #6
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^ Same as Ziggy, any card with a fee or prorated interest games etc... will be shredded. If the day comes where I cant find a no fee no penalty for paying off my balance monthly I will go cash / debit card only.
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Old 10-29-2009, 05:21 PM   #7
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You've got to do more than shred them, you have to call the company and cancel. If you just shred it and leave it active you'll still be responsible for the fee.
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Old 10-29-2009, 05:32 PM   #8
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Good point, I will both shred and call
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Old 10-29-2009, 05:33 PM   #9
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You've got to do more than shred them, you have to call the company and cancel. If you just shred it and leave it active you'll still be responsible for the fee.
Well, yes, when I say "shred" that is obviously implicit.
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Old 10-29-2009, 06:13 PM   #10
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I guess if every card charges a free, then I might actually stick with just one card and pay $29 a year. The float probably comes close to paying that fee, even at 2-3% interest. And cash back would make this even sweeter.

I guess if the fee were too much I could go to a debit card.

However all it takes is one card to promise no annual fee, and I'll go to them. I don't care if I have to get a new card every year. Realistically, I doubt all the CC companies will go from having plenty of no annual fee cards AND paying $100-250 per card to get you to sign up to having only cards that charge annual fees. The new govt regs will undoubtedly make CC's a little less profitable, but probably not all that much.
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Old 10-29-2009, 06:28 PM   #11
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I wish someone would remind us again about how we all benefited from this new law? Thanks, Congress.

I have one card that I've had for almost 30 years. I'd be reluctant to cancel that one (due to impact on my average card age/credit score) if I could come close to covering any annual fee with cash back $$. I would rather use a CC than a DC, so I'd probably keep some of my others as well if it were close to a wash.

The cash back has been great and I'll ride the train as long as it is chugging along, but if I ended up paying up to a hundred dollars net per year for all my cards, it would still be worth it to me and I wouldn't cancel al my cards out of spite. Buyer protection, emergency credit/overdraft, excellent fraudulent use liability limits--they are all worth something when viewed objectively.
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Old 10-29-2009, 06:49 PM   #12
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I'll switch too. I have both USAA debit and USAA credit. Even if everyone else charges, I bet USAA will be one of the last, and probably least expensive. I like them.
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Old 10-29-2009, 06:53 PM   #13
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Pay the FEE if its reasonable. Ive made over 700 dollars for just using my CC this year and paying off the balance monthly. If they charge me 50 to use it big whoop.

Or Ill look for one that does not.

Trees and forest.
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Old 10-29-2009, 08:44 PM   #14
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We'll see what happens. I have a BAC credit card with 1% cash rewards. I charge a lot, so they are making plenty of money off me even with me paying off balances and not incurring late fees. I'll be surprise by a fee - but if it happens and it is higher than a token amount, I'll be giving them a piece of my mind.

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Old 10-29-2009, 09:02 PM   #15
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Quote:
Originally Posted by ziggy29 View Post
Well, yes, when I say "shred" that is obviously implicit.
Sorry, wasn't trying to be a PITA. I have a few cards I shred every time they send me one, but I've never cancelled the account. When I get totally POed at a company I quit using their card, but I don't bother to cancel. I have a CapitalOne card I haven't used in 7 years, but they send me a new one every few years. I expect it will get cancelled soon, because of the new CC environment.

Actually, after reading Samclem and NMLs post, I may consider paying the DiscoverCard fee (if they ever impose one). I do get hundreds of dollars (sometimes more) in points every year. I guess I could just pay the fee with the points. If it was a $30 fee it would be the same as if they had just raised the requirement for points by a few thousand dollars, and I wouldn't cancel just for that, although I might look for a better deal. Thanks for the forest/trees comments.
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Old 10-29-2009, 09:13 PM   #16
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It would seem that there would still be a credit union somewhere *cough* penfed *cough* that wouldn't charge a fee. Bank o' unAmerica would be the last place I'd do business to begin with.

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Old 10-29-2009, 11:03 PM   #17
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DH just reminded me that credit card companies charge vendors a fee to process the cards, so they're getting paid every time I use it.

My sympathy for them is, again, at an all-time low.

Ditto on the PenFed, my local credit union, AAA, our professional associations....
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Old 10-30-2009, 12:55 AM   #18
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My fallback plan has always been to save everything into my 401K or IRA, and to be net underwater at all times outside. If at anytime the credit cards would stop being nice (which they are doing currently), I would just go to Chapter 7 (which I will be doing.)
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Old 10-30-2009, 06:50 AM   #19
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We just canceled one that was going to start charging DW a fee. Strangely, I have the same card and did not get a notice that they were going to charge a fee. Maybe I use it more than DW? In any event, if they do want to charge a fee I'll cancel the one I've had since 1972.
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Old 10-30-2009, 08:29 AM   #20
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Personally, I think it's an idle threat and will not be widespread. I believe credit cards are enormously profitable and competitive, and between the vendor fees and the absurd interest rates card companies are unlikely to bite the hand that feeds them -- even those who pay off each month. They'll happily collect vendor fees and hope their customers get laid off, or screw up a payment every now and then.

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