Jo, from Jo's Cafe, got hit with an annual fee:
So we open the letter and learn we are going to be charged an annual fee of $60. BUT – if we make at least $2,400 in purchases throughout the year, we get our $60 back. Now isn’t that special? Spend $2,340 to get back $60? I heard a report on Fox News this weekend this is one way credit card companies are going to recoup their losses from no longer being able to jack up interest rates on people.
And a friend of mine shared with me a letter from her bank, where they declined her request for a card:
It was a gasoline card. You know, one of those where you're at the pump, filling up, and there's a credit card application in a little box on the pump?
Well, she thought, "Hey, it would be useful to have a card just for gas and related travel expenses! Then all that stuff would be on one statement, easy to find!" (Okay, maybe that's not word-for-word what she thought, but close enough for our purposes.)
But Chase turned her down.
Bad credit? Nope. For good credit.
What does "Anticipated account related expenses likely to exceed expected revenue" mean? Let's break that down.
Account related expenses: That's the cost to print the card, print the statements, pay the postage, etc.
Expected revenue: That's fees, interest, and such.
You see, my friend pays all her credit cards off and rarely, if ever, carries a balance from one month to the next. She doesn't pay a lot of interest. And no late fees. Or over-limit fees. Or anything like that.
She handles her credit card well. Very, very well. So well, the bank figures that, based on her credit performance, they won't make enough money off her to buy the stamps to send her a bill.
So now you know: Banks like Chase aren't interested in offering cards to responsible people. They want to issue cards to people that don't handle their money so well. Like me. They want to take a risk.
We all know how well that worked out before. Really. What could go wrong.