In the wake of the CARD Act comes some belt-tightening by credit card issuers because they now have to treat their most profitable customers as children, rather than letting them suffer the consequences of their financial actions. As these customers are no longer as profitable, issuers need to find money elsewhere.
Enter The Case of the Undead Annual Fee. Customers once enticed by the promise of a card “free of annual fees for life” now find themselves getting slapped around by anything but, counter to printed wording in marketing materials and pre-approval letters. In the end, there's probably little recourse beyond canceling the card, as marketing materials and the like aren't binding on the issuers. (Think “campaign promises.”) The only thing that's binding are the terms and conditions of the card, and they just serve to bind the customer, good and hard.
(Even if it were binding on them, they could just charge you a fee every month and they'd be off the hook. It said “free of annual fees,” not “free of monthly fees.” 😉 Or, as Jim suggested in his article, they can just close out that line of cards and issue a new one that boasts an annual fee.)
Like any business, credit card issuers should be free to offer whatever terms of service allow them to conduct business most profitably. The free market should pull customers from the bad cards to the good ones. Customers can still move around, but now we see that this kind of regulation hurts everyone, including the responsible customers.
Nonetheless, it does serve as a reminder that the rules can, and do, change. Tax laws can, and do, change. Terms and conditions can, and do, change. The annual fees you thought you'd never have? Well, you have them now. Those Funland tickets that never expired? Well, they expired. That sixty-day return policy? What sixty-day return policy? Those taxes that will be lower in retirement? Guess again. Etc., etc.
Assume that the odds will turn against you.
Oh, and have a great evening! 😉
