Credit Card Rules Change Often After Mortgage Crisis

It's no secret that the major banks that are in the most trouble because of the sub-prime mortgage leading crisis are also the same banks that have millions of Visa and Mastercard customers around the United States. That said, it should come as no surprise to the average American that major banks are looking for ways to improve their bottom line after losing billions of dollars in the mortgage loan market and one of the first places they are trying to improve profits is by find new and more elaborate ways to nickel and dime their credit card holders with additional monthly fees and basic charges. For a long time now, people that carry a balance from month to month on their Visa or Mastercard have found silly little charges creeping into their bill which do not make any sense. Credit card companies are very wise when it comes to these small charges because if they raise them too high customers will complain, but if they keep them under a certain dollar amount each month, most customers will just pay them rather than spending 30 minutes or more on the telephone trying to get them removed from their bill.

While it will be impossible for major U.S. banks to recover all of their losses in the sub-prime mortgage market by charging small fees to their credit card customers, they can earn millions of additional dollars each month by coming up with new charges that will not be protested by most of their card members. Recently, a friend told me that in each of his last three billing statements from a major U.S. bank that issued his Visa card, there have been not only new charges - but mountains of new language that is being put into his card holder agreement which will allow even more nickel and dime charges down the road. To me, it is sad that credit card customers of major U.S. banks are being forced to bail that bank out of potential bankruptcy just because millionaire bankers got greedy and made bad home mortgage home loans.

To make matters worse, some major U.S. banks are punishing their current customers not only with nickel and dime credit card charges, but they are also in search of new ways to up the charges on consumers that also have home loans with their bank. For some homeowners that also have a credit card with the same bank as their home loan, these new charges are really wrong because the people that the bank is punishing are the good customers that did not default on their mortgage loan or their credit card account. As with so many things that happen in this country everyday that are wrong, the good customers of major banks are being presented with the financial tab of bad banking practices of millionaire bankers that got greedy and did the wrong thing. That said, there isn't much most Americans can do about this injustice unless they can find some other bank to do business with or they have the money necessary to pay off their credit card balance and home mortgage.

In my opinion, the mortgage loan mess is just the first of many crisis' that major U.S. banks will have to deal with over the next couple of years. There is an old saying that says that 'crap flows down hill' and when it comes to the U.S. financial markets that is very true. While U.S. banks look for new tricks to separate their customers from their money using credit cards fees and charges, at the same time they will be pushing their own best customers even further toward the brink of financial disaster. I believe the entire U.S. banking system as been little more than a massive kiting scheme the past five or ten years and like with any kiting scheme eventually there is a day of reckoning when the bad deeds of the past much be flushed out of the system. The worst part about this story is that rather than a single individual using a kiting scheme to enrich himself, there are billion dollar banks that tried the same practice for awhile themselves. How the U.S. economy is going to deal with this crisis over the next few years will be interesting and painful to watch.

Title: Credit Card Rules Change Often After Mortgage Crisis
Written: May 16 2008
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