Today on the Consumerism Commentary Podcast, Jay Frosting and Flexo talk with Matt Schulz, Vice President of Content for InvestingAnswers.com.
They discuss the implications of a recent legal ruling that excludes credit card application fees from the limit on fees that credit card issuers can charge within the first year.
Table of contents
[00:00] Introduction from Jay Frosting
[00:33] Interview with Flexo and Matt Schulz
— [00:49] Challenging the 25% fee limit specified in the Credit CARD Act
— [06:00] Will application fees be more pervasive now?
— [07:14] Are these fees limited to those with bad credit?
— [09:18] A very high interest rate is worse than almost any other option
— [12:34] The CFPB is still hearing public comments on this decision
— [13:41] Application fees aren’t refundable and don’t guarantee credit
— [14:21] The CFPB is trying to get more done before a possible Executive Branch change (addressing Republican criticisms of the bureau)
— [18:33] Reduction in debt is part frugality and part banks reducing credit
We were mistaken during the recording regarding whether First Premiere refunds its application fee. Here’s what the terms and conditions say:
“Right to Reject: You may still reject this plan, provided you have not used the Credit Account or paid a fee after receiving a billing statement. If you do reject the plan, you are not responsible for any fees or charges, including any Processing Fee(s) paid prior to receipt of your Account Opening Disclosures. Any such Processing Fee(s) previously paid will be refunded upon rejection of the plan.”
It also says this:
“Refund Disclosure: We will refund your Processing Fee and initial fees (those fees that are billed at the time of account opening) if (1) you have not used your Card for a Purchase or Cash Advance; and (2) you have not paid a fee after receiving a billing statement. We will refund any partial payment of the Processing Fee if you do not open your Credit Account within 85 days of approval. We will refund any Credit Limit Increase Fee charged to your Credit Account if you notify us, within 30 days of the date of the Periodic Statement on which it appears, that you do not wish to have the credit limit increase. This will result in a reversal of the credit limit increase. Except as described in this paragraph, these fees are non-refundable.”
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Updated April 13, 2016 and originally published April 22, 2012.