Credit Cards Doing Away with Grace Period

[dimpy.handa]

Say goodbye to credit card float.

For those of you who use your credit cards for ordinary purchases and take advantage of the interest-free grace period by paying off your credit card balances in their entirety every month, you may need to rethink that strategy.

The New York Times states, "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 may be time to revert to the debit card, checks, and even cash

 

[deepakraam]

I think this will not come anytime soon.Visa and Mastercard will vehemently protest this.Both the companies earn billions as service charge for using their credit cards.Moreover, banks also earn lot of money thru credit cards.People who fail to make the payment on time are paying hefty fine to make the companies rich.Most importantly,people are addicted in using credit cards.People don't want to carry the cash everytime they go for shopping.It also reduced the no.of ATM transactions.So,I would say credit card will never become history so soon.


-Deepak.

 

[sawan_n]

Only premium cards might come with an Annual Fee at the moment.

It makes sense to offer free cards to people who have a higher propensity to default on a timely payment. Such customers are the ones who are at the lower end of segment. To them, banks would be happy to offer a basic card without annual fees and expect them to default once!

 

[Jai.Ganesh]

This scheme will not be introduced because then people will avoid applying for credit cards, and if they do not spend on cards then where will the banks get their income from??