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Strategies & Market Trends : Mish's Global Economic Trend Analysis

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To: Crimson Ghost who wrote (24196)	2/24/2005 12:44:29 AM
From: mishedlo	Read Replies (2) of 116555

Just Wondering I was in the banking business for over 20 years but that was 4 years ago now. Lately I have been wondering about some things. Does anyone remember ATM fees (or rather the lack of them)? Initially there was “No Charge” on the rationale that banks would save on tellers. Then the charge was 25 cents. Then the charge was 50 cents. Now the charge is $1.25-$2.50. Those charges are waved for the “home bank”. How much longer will that last? Just Wondering On the credit card side we are already seeing the following: Increased late fees Increased over limit fees Statements being sent out as late as possible, purposely giving people less time to get a check in the mail Due dates being purposely set on Sundays or Holidays giving people one less day than appears to get their check in the mail International transaction fees being jacked up from 1% to 3% (These are immediate and are charged whether or not you carry a balance) Interest rates set as high as 30% Miss one payment accidentally and your rate pops up to the maximum Card companies looking at late payments not only on their cards but any card as a basis for raising interest rates Card companies looking at late utility payments as a means of jacking up the interest rate Increased use of two cycle billing (This effectively cuts the grace period on purchases to zero for anyone that carries a balance) In order to get around state interest rate caps, banks moved their card operations to states such as Delaware that have no cap limits Offers to “skip-a-pay” (you are charged interest of course just no late fee) Increased credit limits. Etc, etc, etc (I am sure I missed many more tricks, gimmicks, hidden fees, and costs) None of the above has affected me much since I always pay my balance in full. Those using a card that offers 1% cash back such as Discover should be forewarned that if they carry a balance they might be paying dearly for it. There is typically zero grace period on purchases if you run a balance on such card. Discover will give you 1% but you pay 9-18% or whatever immediately on new purchases. This is NOT a good deal if you carry a balance. If you make a lot of international purchases it might behoove you to make sure you are not paying an extra 3% for those transactions. Just thought I would pass this info on. Perhaps it helps someone. Given every which way card companies have attempted to extract every last penny out of everyone, how long will they put up with freeloaders like me who pay off their balance every month? Just Wondering How long will it be before it is 10 cents per credit card use? Just a dime?! Of course that will be in addition to the 1-2% the merchant pays. Then a quarter? Then fifty cents? Then a dollar? To prevent customer bitching perhaps there will be a 10 cent minimum to a 1% max. Just a percent? Yeah just! Perhaps if you carry a balance and there will be no charges Wow what a great deal! Pay 8-30% interest or whatever and they will wave the 10 cent fees. Like zero ATM fees, how long will that last? How long will all of this take to play out? Just Wondering How much profit will this add if the card companies can pull this off? Just Wondering How long before new bankruptcy laws are passed and people still owe their soul to the company store coming out of the process? Just Wondering How long after that will there be a public revolt, usury laws, credit limits, credit laws, and re-regulation? Just Wondering Michael Shedlock

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