All Articles Tagged "credit card fees"
Everybody knows the perils of credit card scams that try to lure young college students into debt on campus. But what you might not know is that many colleges are also in on the scams. According to the Associated Press, there are as many as 900 colleges opting to use credit card companies to handle student financial aid money. These payment cards come with heavy fees that benefit both the college and the bank sometimes through secretive deals. A report obtained by the AP reveals that these financial gains are sometime even in violation of federal law.
“They sold it as a faster, cheaper way for the college to get students their money,” Parker-Milligan, the student body president at Lane Community College in Eugene, Oregon said to MSNBC. “It may be cheaper for the college, but it’s not cheaper for the students.”
Higher One is one of those companies accused of baiting students into debt. The company has agreements with 520 campuses that enroll over 5.3 million students, that’s one-fifth of the entire enrolled student population. The report also shows that combined, Wells Fargo and US Bank have deals with schools that enroll 3.7 million students. Higher One charges fees $50 for an account that is overdrawn more than 45 days, $10 per month if the account remains inactive for six months, $29038 for overdrawing with a recurring bill payment and 50 cents each time a PIN is used instead of a signature at a store.
In response, the company’s Chief Operating Officer Miles Lasate says that Higher One is, “committed to providing good value accounts that are designed for college students.”
Despite the company’s claim of good intentions, these fees are adding up to the mountain of debt many students already face from loans. According to the Consumer Financial Protection Bureau, U.S. student debt has reached $1 trillion.
Credit cards aren’t free. In fact, if you’re not careful, your credit cards can bury you under an avalanche of fees. Some of them can’t be avoided, but many of them can. You just have to know where to look and what to do.
Every credit card company charges interest fees on the purchases you make–it’s how they make a profit lending you money. However, most of them only apply interest to your balance if you carry it over from one month to the next. If you pay your balance off at the end of each month, you can go interest fees altogether.
(Wall Street Journal) — After this month’s crisis in Japan, the Red Cross raised tens of millions of dollars via credit-card donations. In response to the tragedy, Visa, MasterCard and American Express waived their credit-card fees, bringing the organization more than $1 million in additional funds.This goodwill gesture masks an ugly reality: Our growing love affair with credit cards, especially rewards cards, carries a real cost for our charities, which wind up footing the bill for our card fees. Retailers can adjust their prices to cover fee expenses. That isn’t an option for charities, religious groups and other nonprofits, which usually can’t pass along the fees because of rigid credit-card rules. Card transaction fees have long been embroiled in controversy. The Federal Reserve, prompted by last year’s Dodd-Frank financial-overhaul law, has proposed capping debit-card fees at 12 cents a transaction from an average of 44 cents now. Banks are up in arms over the proposal, saying that cutting the fees will lead to limits or new consumer charges on debit-card use.
(Kansas City Star) — Almost everyone who has traveled overseas and made purchases with a credit card has been stung by currency conversion fees, a charge for changing dollars into the local currency. If you want to avoid the fees, one card stands out: Capital One Visa. According to Greg McBride, senior financial analyst at personal finance website Bankrate.com, Capital One charges nothing for foreign credit card purchases, debit card purchases and credit card cash advances.
(Wall Street Journal) — The nation’s new consumer watchdog agency, the subject of much banking-industry angst, plans to release a report Tuesday with some favorable news about giant credit-card issuers: Banks have eased up on credit-card rate increases and turned more consumer-friendly over the past year.
“Leaders in the industry deserve credit for moving in the right direction,” Elizabeth Warren, a White House adviser in charge of setting up the new Consumer Financial Protection Bureau, plans to say in remarks prepared for a Tuesday credit-card conference. Ms. Warren said that “much of the industry has gone further than the law requires in curbing repricing and overlimit fees.” The Consumer Financial Protection Bureau report represents the agency’s first research on the credit-card market.
(New York Times) — Last summer, the Senate, while debating what eventually became the Dodd-Frank Wall Street Reform and Consumer Protection Act, took a stab at reining in fees for debit and credit cards. The amendment, proposed by Illinois Democratic Senator package Durbin, would have ended the card networks’ practice of preventing merchants from using incentives to steer customers toward other credit cards and credit card brands. When the bill reached the president’s desk, however, that provision had been replaced by one that allows merchants to offer discounts only for certain forms of payment.
(Wall Street Journal) – Regulars at Peter Luger Inc., the iconic steakhouse in Brooklyn, N.Y., know the drill. If they’re not toting cash or the restaurant’s own credit card, they’ll have to run to the nearest cash machine when it’s time to pay the bill. The steakhouse, like a number of small businesses, has long refused to take credit because of high interchange or “swipe” fees paid to card companies and banks.
(CNN Money) – Most credit card penalties will be limited to $25, and fees for customers who don’t use their cards will be eliminated under rules released Tuesday by the Federal Reserve. The Fed also ordered a review of all credit card interest rate hikes imposed since January 2009, including most of the record increases that came in the wake of a nationwide cutback on credit.