Once again taking from those that are responsible, and giving to those that are not.

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.”…

[...]

People who routinely pay off their credit card balances have been enjoying the equivalent of a free ride, he said, because many have not had to pay an annual fee even as they collect points for air travel and other perks.

“Despite all the terrible things that have been said, you’re making out like a bandit,” he said. “That’s a third of credit card customers, 50 million people who have gotten a great deal.”

[...]

The industry says that the proposals will force banks to issue fewer credit cards at greater cost to the current cardholders.

The credit card industry has long deployed a business model that depends on people who are less likely to pay. It’s allowed them to rack up fees for late payments and interest that is higher than street corner loan sharks charge. What ever happened to the model of generating revenue from the merchants that accept the cards? Oh, they still do that.

For those of you that pay on time, look out. You may soon get screwed and without even getting a kiss.

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