VERIZON and JCPenny credit card users are about to be hit a with a new $2.99 monthly fee.
Synchrony and Bread Financial which issue cards for the two companies said the fee was necessary after the Consumer Financial Protection Bureau announced a rule slashing what the industry can charge in late fees.
GettyVerizon and JCPenny credit card users will incur a monthly fee for using paper statements[/caption]
The CFPB says the credit card industry profits off borrowers with low credit scores by charging them onerous penalties.
However, instead of slashing fees, banks have passed the cost on to customers.
KBW analyst Sanjay Sakhrani said: “They’re the two banks that have been most vocal about it, because they were going to be the most impacted by it.”
“The consensus now, however, is that the rule isn’t going to happen.”
In March, the agency introduced a rule to cap late fees at $8 per incident, down from an average of about $32.
The rule would save consumers $10 billion annually.
Bread CFO Perry Beberman said: “We’ve implemented a number of changes that are in market, including the APR increases and paper statement fees.”
The higher APRs kick in for new loans, not old debts, meaning the impact to consumers will rise.
Customers who use credit cards linked to Verizon and and JCPenny can expect to see a monthly fee between $1.99 and $2.99 for receiving paper statements.
Synchrony Bank have co-branded and store-affiliated credit cards with Sam’s Club Credit Card, the Lowe’s Store Card and Amazon Store Card.
Credit card users have taken to social media Reddit to express their anger about the fee.
One user warned: “I have the Paypal mastercard and got a letter in the mail today. Beginning in April they will start charging if you are not using electronic statements.
“It is a small fee of $2.50 but still just a heads up if anyone has any cards by them may want to check.”
Another said they were “closing [their] account” over the fee.
However, there is one way to prevent the monthly charges, with customers opting to choose to receive electronic statements.
While there isn’t a law banning paper statements, permission is required to begin paperless billing.
SIGNS YOUR CREDIT HAS BEEN COMPROMISED
Here are signs your credit has been compromised:
Recognizing the early signs of identity theft is essential.
Michael Bruemmer, vice president of Experian Global Data Breach Resolution and Consumer Protection, outlined several warning signs, including:
Unrecognized charges to your credit card or bank account
Unexpected credit checks on your report
Receiving unfamiliar bills
A sudden drop in your credit score
“All of these could be red flags that someone is using your identity,” he warned, adding that early detection can help minimize the damage.
https://www.the-sun.com/money/13025770/credit-card-users-slammed-with-new-monthly-fee/