When the Credit Card Accountability, Responsibility and Disclosure Act of 2009 was moving through Congress, many surmised that passage would mean increases in existing fees and the introduction of new fees.
To see what's happened since many provisions of the law took effect in February, Bankrate.com surveyed the 50 largest credit card issuers and compared the fees on their most basic credit card offerings. In some cases, a platinum card was used where standard or classic cards were not available. In total, we compared 73 cards -- 33 of them from credit unions, and 40 from banks. For presentation purposes in the survey results, we narrowed it down to the basic cards offered by these issuers, which came to 47 -- 28 from banks and 19 from credit unions. Of the 73 cards surveyed, only 12 cards across credit union and bank issuers had a fixed interest rate.
So far, very few issuers have implemented inactivity or annual fees, two fees people feared would result from the restrictions of the Credit CARD Act. Many of the provisions of the law took effect in February, while guidelines on the reasonableness of penalty fees go into effect in August 2010.
In addition, many issuers we surveyed don't charge over-the-limit fees, which are restricted under the CARD Act. Other fees, such as fees for balance transfers and cash advances, haven't made dramatic increases across the board.
Here are the results of the 2010 Credit Card Fees Study.
Inactivity feesNone of the credit union cards we looked at charged an inactivity fee, though 13 had closure timetables for nonuse. For example, the Patelco Credit Union Classic card doesn't charge a fee for nonuse, but requires one to two transactions per year to keep the account open. In some cases, the deadline comes even sooner. With a Redstone Federal Credit Union Classic card, for instance, the account may be considered dormant after just six months of no activity.
Three banks charged an inactivity fee. For example, Fifth Third Bank Platinum Card levies a $19 fee if no transactions were made during the previous year, while First National Bank of Omaha may impose a $29 to $75 fee after just six months of no activity on its platinum card.
Many banks indicated that dormant accounts could be closed after a specified period of time, which ranged from a few months to as much as three years. HSBC Platinum Card is the least tolerant of nonuse: An account may be shuttered after just three to four months of no activity.
Takeaway: The Federal Reserve may issue a final rule that restricts or even bans inactivity fees later this year as part of the CARD Act, but issuers may still close accounts for nonuse. Use cards you don't want to see closed at least once a quarter.
Annual feesFive credit cards out of the 73 surveyed charge annual fees. The platinum card from Intrust Bank and US Bank each impose an annual fee only in the case of year-long inactivity. The Boeing Employees Credit Union Classic card charges $25 every year to access the optional rewards program.
Takeaway: Many cards come without an annual fee. Shop around. With fee-based rewards cards, always weigh the value of the rewards against the yearly surcharge.
Over-the-limit feesIn Bankrate.com's weekly surveys of credit card interest rates, a steady trickle of issuers have dropped the over-the-limit fee. In this study, 29 out of 73 cards have an over-the-limit fee, which ranges from $15 to $39. In our June 2009 credit card study, over-the-limit fees averaged $32.
A fee won't actually apply unless you give the issuer permission to allow over-the-limit transactions. The CARD Act prevents issuers from charging a fee for going over the limit unless the cardholder has given prior consent.
Takeaway: Many cards don't charge an over-the-limit fee, and even the ones that do can't impose it unless you have agreed to over-the-limit fees. The flip side is that an issuer may deny over-the-limit transactions if you haven't opted in, and the bank may also lower your credit limit without advance notice. Check your credit limit each month and stay well under it.