This Day On The Street
Continue to site right-arrow
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Seven Credit Card Predictions for 2010

Stocks in this article: BAC C JPM

WASHINGTON ( TheStreet) -- Credit card issuers have lost billions of dollars on bad loans during this economic downturn, and new rules might hurt their revenue streams further.

In May, Congress passed the Credit Card Accountability, Responsibility and Disclosure Act, a law designed to protect consumers from rapid interest rate increases and certain penalties. Some of its provisions began in August, and the next become effective on Feb. 22.

Issuers are trying to find ways to boost their incomes, and these efforts will likely come at the expense of cardholders. Here are some predictions for the credit card industry this year:

1. More cards with annual fees: About 20% of credit cards in the U.S. have an annual fee. That percentage will increase this year. New cards have already been introduced with annual fees and some credit card issuers are testing annual fees on their existing cardholders.

In October, Bank of America (BAC) told a small percentage of customers that it planned to charge an annual fee of $29 to $99 on their accounts beginning this month. Only a few customers (0.5%) received the notice, but the outcry against this annual fee was loud.

JPMorgan Chase (JPM) is using premium rewards to encourage customers to select or upgrade to cards with annual fees. They introduced the Sapphire Preferred card, which has an $85 annual fee and enhanced benefits.

2. Increases in interest rates: Even though the CARD Act limits the issuers' ability to raise rates "at any time, for any reason," expect issuers to find loopholes and create opportunities to raise rates. Because the CARD Act limits interest rate hikes during the first year for cardholders, issuers are likely to boost their advertised annual percentage rates to lock customers in at a higher rate.

3. Increases in existing fees: The CARD Act doesn't limit fees, so expect issuers to raise existing fees. For example, the industry standard for balance transfer fees was 3% a year ago. If you transferred $10,000, you would incur a $300 fee. Bank of America has since increased its balance transfer fee to 4%, and JPMorgan and Discover (DFS) lifted their fees to 5%. Expect other issuers to follow. Cash advance fees are also likely to increase.

4. Introduction of new fees: Expect issuers to add new fees. Fifth Third Bancorp (FITB) charges users a $19 inactivity fee if they don't use their cards for 12 months. In August, Citigroup (C) informed some cardholders that they will be charged an annual fee of $30 to $90 unless they spend at least $2,400 per year. Some retail cards are adding a $1 monthly processing fee if you request a printed statement.

1 of 2

Select the service that is right for you!

Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!


DOW 18,053.71 +23.50 0.13%
S&P 500 2,088.77 +6.89 0.33%
NASDAQ 4,806.8590 +33.3870 0.70%

Brokerage Partners

Rates from

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs