`FREELOADERS' BEWARE : CREDIT-CARD HOLDERS FINED FOR PAYING MONTHLY BALANCE IN FULL.Byline: Patricia Lamiell Associated Press Associated Press: see news agency. Associated Press (AP) Cooperative news agency, the oldest and largest in the U.S. and long the largest in the world. You may be proud of yourself for paying off your credit card balances every month, but some card companies think you're a freeloader free·load intr.v. free·load·ed, free·load·ing, free·loads Slang To take advantage of the charity, generosity, or hospitality of others. . Caught between those who don't pay their balances and those who pay them before racking up interest charges, credit card firms are looking for Looking for In the context of general equities, this describing a buy interest in which a dealer is asked to offer stock, often involving a capital commitment. Antithesis of in touch with. new penalties and fees to slip onto their statements. One way is to begin charging customers who pay their balances in full or who leave their cards in a sock sock white mark on the feet. In horses this means from the coronet to halfway up the cannon. In dogs and cats, it is white from the paws up to the carpus or hock. drawer A person who orders a bank to withdraw money from an account to pay a designated person a specific sum according to the term of a bill, a check, or a draft. An individual who writes and signs a Commercial Paper, thereby becoming obligated under its terms. for emergencies. About 20 percent of GE Capital Corp.'s GE Rewards MasterCard holders fit that description. GE Capital informed those card holders by mail last week that it would begin charging them $25 per year if they don't carry a balance. The fee also applies to customers who don't use the card at all. GE Capital is the first major card issuer to assess such a fee. But other credit card issuers have found other ways to collect more money from card holders. For example, AT&T in the past year started allowing less time to pay late bills before imposing a $15 fee. AT&T had waited 10 days to charge the fee, but now gives customers as little as one day. ``I think it's inevitable that you're going to see a penalty fee arise'' for those customers who do not incur To become subject to and liable for; to have liabilities imposed by act or operation of law. Expenses are incurred, for example, when the legal obligation to pay them arises. An individual incurs a liability when a money judgment is rendered against him or her by a court. interest charges, said Robert McKinley
Robert Elgin McKinley (born 14 August 1928 in Zurich, Ontario) was a Progressive Conservative party member of the Canadian House of Commons. , president of RAM Research, a Frederick, Va., credit-card research company. GE Capital, a subsidiary of General Electric Co., won't say how many accounts it has outstanding. RAM estimates it at 3.7 million, or around 5 million cards. Like others, GE doesn't charge an annual joining fee. In the days of heated competition in the industry in the early 1990s, many companies shunned annual fees and instituted elaborate incentives, such as cash rebates, to encourage use of their cards. Many issuers gave out cards to people who turned out to be bad credit risks. But on the other end of the spectrum were people who religiously paid off their balances, thus avoiding interest charges. The problem is, the issuers need the interest income to finance all the incentives. So they have to begin charging all of their customers, even those who don't pay interest. ``The big thing now is, how do you extract income from this group of people who basically freeload free·load intr.v. free·load·ed, free·load·ing, free·loads Slang To take advantage of the charity, generosity, or hospitality of others. onto the system,'' McKinley said. ``They'll bring the annual fee back disguised dis·guise tr.v. dis·guised, dis·guis·ing, dis·guis·es 1. a. To modify the manner or appearance of in order to prevent recognition. b. To furnish with a disguise. 2. as a penalty.'' GE says people who pay off their cards monthly - and thus don't pay interest - should still pay something for the convenience of a charge card and the benefits of GE's cash-back offers. GE Capital spokesman Neal McGarity said the costs of running the program are covered largely by interest income. ``We chose a fee in this situation instead of cutting any of the rewards,'' he said. GE card holders who carry a balance for 25 days or more pay 17.1 percent in interest charges. GE uses the interest income to finance cash rebates to card holders of up to $140 a year. To get the maximum rebate rebate, partial refund of the total price paid for goods or services. In the United States, rebates were historically given by railroads to favored shippers as a return on transportation charges. , customers have to charge $10,000 a year. McKinley estimates that GE loses $65 a year for every customer who earns the maximum rebate but pays off the account. As an added incentive to card holders to carry a balance, GE will lower the interest rate for those who pay off their balances to 11.9 percent. About 36 percent of all credit card holders pay down their balances on any given month, McKinley said. That number has grown from 29 percent at the height of the recession in 1991, McKinley said. They are also quite conscious of getting a good deal on their credit cards. McGarity said a few GE card holders have canceled their cards because of the annual fee, but added, ``We certainly hope there aren't a lot more'' cancellations. |
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