No More free Miles using credit cards

[rickandcindy23]

Merchants do pay a lot to offer credit cards, and because this is where the real money comes in, so I am doubting CC companies will start charging interest from day 1. They could charge $500 in annual fees for that FF card and get by with it, since I don't think that's regulated.

And I like Denise's idea of overpaying on the card for future purchases, or going online and paying for the purchase the day it's made. I can do that with Barclay's card.

 

[Rose Pink]

The merchants still pay an interchange fee, but it's a small fraction of what the discount plus interchange rate is for credit cards. Merchants would love it if everyone used debit instead of credit because it obviously costs them less. ....

Thank you for the clarification on fees. I wasn't sure about it. I don't carry a debit card for the reasons you and others have given but merchants usually ask me if my card is debit or credit.

 

[Dollie]

In my opinion, however, consumers are silly to even carry debit cards - they're a lot riskier because a criminal can clean out your bank account by having the card run as a credit card without a PIN. You are protected, but you're out the money in your account while fraud is being investigated. With a credit card, you never have the exposure.

I use a 2 account approach even though I do not presently have a debit card (but this would work if I did). I have a checking account and a saving account. These are separate and not linked together. The checking account is used for paying bills either by written check or via e-banking. It contains enough funds to cover the bills plus a small amount extra. It is accessible on-line and has an ATM card capability (would have a debit card if I wanted one). The savings account holds the working capital I need (the rest of the funds are invested). I can fiscally (in person at the bank) transfer funds between the accounts (majority of the time from the savings to the checking). A criminal if they get access to my ATM card, checks, (or debit card) would only have access to the checking account, not the savings account where the majority of the money is. This approach requires a little more managing of funds and planning, but the security/peace of mind is worth the effort for me. It also has the side affect that you have more of a tendency to think twice about spending money since you are conscience of the amount of money that will have to be transferred to cover the purchase.

 

[falmouth3]

How does one avoid those fees? Is there are card that doesn't charge them? Also, why can't you write a U.S. check to pay your maintenance fees in Australia? Is there a charge for that? I have always used my CC's to pay my maintenance fees, but I resent that charge and would like to find an alternative.

My credit union card will only charge me the 1% fee imposed by VISA. The credit union does not add on the other "junk" fees. That's the card I use in Europe.

Sue

 

[M. Henley]

Free Miles

Betweeen Rita and I we have received 5 free RT flights in the past 12 months, not all due to CC purchases as some are due to hotel stays.

If the CC companies decide to cease giving perks and/or charge interest from day one of the purchase, I would seldom utilize a CC, and would revert to my old ways of paying cash. A CC would be then be used only for on-line purchases, for guaranteeing hotel rooms, which would then be paid for by cash when checking out, and for reserving rental cars, which again would be paid for by cash when the car is returned.

 

[pointsjunkie]

from one who charges everything and pays it off each month, this new fee would really be awful.

i do take advantage of the FF system, i get many free flights per year. i would really have to sit down and calculate(when the terms finally come to the public) if it would still be worth it.

i just used 45000 miles for a first class ticket that would cost $1598.01 if i paid cash.

i would be so upset if the credit card companies started charging interest. i do like the prepay idea denise had. how would that effect our credit scores if they started to charge interest and it showed up on a credit report?

i still have 500000 FF miles and 2 jetblue, and 1 southwest and 200000 starpoints all for future flights.

but if i had to pay for my flights, i usually fly somewhere every month it would stop me dead in my tracks. this has me so upset.

 

[gorevs9]

i do like the prepay idea denise had.

I'm guessing you would have to prepay by check. Neither of my CC accounts will allow an online payment of more than the current balance.

 

[Luanne]

So does anyone really know for sure what any of the credit card companies are going to do? Or is all of this speculation on what might happen?

 

[K2Quick]

from one who charges everything and pays it off each month, this new fee would really be awful.

but if i had to pay for my flights, i usually fly somewhere every month it would stop me dead in my tracks. this has me so upset.

It's way too early to say that whatever card you carry is going to have its terms significantly altered. A responsible card user such as you will be extremely attractive to many lenders.

 

[Rose Pink]

So does anyone really know for sure what any of the credit card companies are going to do? Or is all of this speculation on what might happen?

At this point, I think it is all speculation but is a rememder to keep your eyes open. CC companies have changed credit limits and interest rates without prior notification to the card holder. I hope they will have to provide plenty of lead time before they start charging point-of-sale interest (if they ever do).

 

[JeffW]

To some degree, I can't help but think that there's a lot of "the sky is falling" fear going on here. Will some credit card companies change, absolutely. But will the majority, I don't think so. There's just too much competition out there for "all credit card perks to go away", or "all cards now will accrue interest from time of purchase."

But as previously pointed out, you really need to keep track of your cards. The extreme changes (card being cancelled, credit limit severely cut back) will probably be pretty easy to spot. It's the others: rebate rates (cash back / FF miles earned) going down, change in when interest accrual starts - that are likely to be not as visible.

Jeff

 

[Icarus]

Alan,
Your "old friends" aren't going anywhere. However, they may morph a bit.

hahaha. No way in hell he has a Diners Club card because they aren't free.

tombo:

I'm not buying into any of your scenarios or political messages in this thread. The banks are whining. They have the best lobbyists and are very good at getting their POV heard. That's all it is.

I remember the days when they really did actual underwriting when you applied for a credit card and the credit lines they gave out were reasonable. The amount of credit they give out now is ridiculous even for people that are in good financial condition. There's really no way to justify those multiple $20,000++ credit lines that they give out to normal people. If their entire business model is based on those punitive interest rates and late and over the limit punitive fees they charge people on the edge, then it's time that somebody reigned them in, IMO.

Denise:

Don't worry. Amex and Starwood will still be in business together. So will Chase and United, etc, etc.

Is anybody loosing sleep over this? Go and apply for the United Chase Visa that gives you 30k - 40k miles after something like $250 in charges. Go and apply for the Starwood Amex which gives you up to 25k SPG points. They aren't going anywhere anytime soon.

-David

 

[AwayWeGo]

Zero Dollars & Zero Cents.

No way in hell he has a Diners Club card because they aren't free.

When I (briefly) had Diner's Club, it was free.

Go figure.

-- Alan Cole, McLean (Fairfax Coiunty), Virginia, USA.​

 

[Icarus]

When I (briefly) had Diner's Club, it was free.

Go figure.

-- Alan Cole, McLean (Fairfax Coiunty), Virginia, USA.​

Yes, I figured.

The US Diners Club franchise is owned by Citibank. I have one. In the US they issue them as Master Cards with the DC logo on them. They are pricey too, but have excellent rental car coverage and you can use their points to pay the $95 annual fee. Their points program used to be a good way to move miles around without loosing like 90% of their value, but that also disappeared over the years.

-David

 

[Carolinian]

How does one avoid those fees? Is there are card that doesn't charge them? Also, why can't you write a U.S. check to pay your maintenance fees in Australia? Is there a charge for that? I have always used my CC's to pay my maintenance fees, but I resent that charge and would like to find an alternative.

Most Credit Unions only charge 1% foreign usage imposed by Visa/Mastercard and a lower (or free) ATM out of network fee. CapOne (the best) does not even charge that.

 

[kamumma1]

If CC companies start charging from the gecko - that will stink! I refuse to pay interest on a purchase from Day 1 (will lose the cards), which yes, will impact our travel. We put all of our personal and small business expenses on a Marriott rewards card. Each year we trade 1 of our weeks for points and stay at one of their Cat 6 hotels and get free airfare for 4. If we can't get the CC miles, we will have to start using our two times shares and pay for both trips' airfares . That was one of the selling points we bought the second unit for. We will still travel, but won't get travel packages anymore. I would seriously miss the Marriott hotels .

 

[jehb2]

In addition to the FF benefits I have my monthly bills automatically charged to my cc because it just makes life easier. At one time I use to lock myself in my daughter's playpen so she couldn't get at the bills when I paid them--and that still was an effort.

But if they start charging me interest even though I pay my balances in full then I'll have to operate on a cash only basis. We pretty much do that now in our daily spending.

I just hope they don't mess with my debit card.

 

[HuskyJim]

The changes in the Credit Card rules, based on what was passed in May (and previously in November), has a companion effort going on in Canada.

Canada has similar rules to the US, but many differences.

But Canada will be implementing a new rule (next year) to forbid the practice stated here - charging interst on ALL purchases, even if you always pay in full.

Canada law will force the CC companies to honor a 21-day grace period on all new purchases when you pay in full. This will even apply for those that had carried a balance.

"... interest on new purchases is not charged if the cardholder pays off the balance in full at the end of the billing cycle irrespective of whether the cardholder carries a balance."

I think that this will force a similar rule in the US, eventually.

 

[HatTrick]

If CC companies start charging from the gecko - that will stink!

What does GEICO have to do with this? (I think you mean "from the get-go".)

 

[tombo]

hahaha. N

tombo:

I'm not buying into any of your scenarios or political messages in this thread. The banks are whining. They have the best lobbyists and are very good at getting their POV heard. That's all it is.



-David

This is not my scenario. I am just asking the what if question. I did not invent the idea that the CC companies are going to do these things but I do keep reading about the potential future changes and seeing stories about it on the news. It might never happen, but there is too much speculation on too many sites to poo poo the whole notion.

Here are 2 more articles:


http://www.koco.com/news/19540811/detail.html

http://www.nytimes.com/2009/05/19/b...l=1&adxnnlx=1245276233-nr4GWDAolMiwoU8xIWZLHw

Of course everyone on the internet knows more than newspapers and television news departments. I don't believe everything I read, but usually where there is smoke there is fire. I have not read a single article that says that none of this will happen, but I have read several that say the changes might occur, or even worse that the changes will happen.

Time will tell.