Credit card industry to alienate prime customers

They really are a brilliant bunch. What successful business model relies on giving the shaft to your best customers? Forget the excuse about being forced to deal with risky customers because that’s exactly what the industry wanted for years and now they’re being asked to clean up their mess. They were sending out pre-approved credit card applications to anyone including the baby daughter of my friend. The industry has been foolish for years and now they will continue the stupidity with this. If they really want to discourage good customers from using credit, go for it and see how long their beloved shareholders tolerate that model.

Now Congress is moving to limit the penalties on riskier borrowers, who have become a prime source of billions of dollars in fee revenue for the industry. And to make up for lost income, the card companies are going after those people with sterling credit.

Banks are expected to look at reviving annual fees, curtailing cash-back and other rewards programs and charging interest immediately on a purchase instead of allowing a grace period of weeks, according to bank officials and trade groups.

“It will be a different business,” said Edward L. Yingling, the chief executive of the American Bankers Association, which has been lobbying Congress for more lenient legislation on behalf of the nation’s biggest banks. “Those that manage their credit well will in some degree subsidize those that have credit problems.”

The smart customers are smart for a reason. Good luck pissing them off in this business environment.


An American in Paris, France. BA in History & Political Science from Ohio State. Provided consulting services to US software startups, launching new business overseas that have both IPO’d and sold to well-known global software companies. Currently launching a new cloud-based startup. Full bio here.

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