New credit card users carry fee burden
Since Congress enacted recent overhauls of the debit card system last year, many credit card companies have been looking for new ways to increase their slumping revenues. One way many card companies are doing this is by increasing the number of fees associated with their products.
However, recent research suggests new cardholders are paying a disproportionally large share of these charges because of their inexperience with reading and understanding credit card agreements.
In a 2008 study, new cardholders were found to pay $15 more on average in monthly fees than more experienced card users, Forbes reports. Within the next four years of use, however, this number decrease by 75 percent as these users adapted to the system.
In recent weeks, many major banks have announced plans to roll out fees on products, eliminating free checking and other services for new customers. In addition, these offers will come with minimum balance and monthly use requirements.
As a result, young consumers and inexperienced credit card users could benefit by asking friends and relatives for credit guidance, or by pursuing more information online.