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Credit card law may boost spending

Wed, 05/19/2010 - 08:00 by harsheeb

Washington -- U.S. consumers will save enough from the Credit Card Act of 2009 to effectively create an economic stimulus, one of the measure's co-authors says.

Estimates of fee reductions in 2010 range from nearly $2 billion to nearly $10 billion due to the law that took effect Feb. 22, USA Today reported Tuesday.

That amount constitutes its "own little stimulus for the economy, keeping billions in the pockets of consumers rather than in profits gained by deceptive practices," said Rep. Carolyn Maloney, D-N.Y.

Moebs Services estimated bank fees, as a source of revenue for credit card companies, would drop by $1.9 billion to $35.2 billion this year. R.K. Hammer Investment Bankers estimates revenue from credit card fees will fall $9.9 billion this year.

Moebs said credit card firms are inventing new revenue streams as overdraft fees drop.

Based on a survey of seven of the 10 largest credit card firms, including Bank of America, Wells Fargo & Co. and Citigroup, and seven major commercial banks, USA Today estimated credit card fees would fall at least $5 billion this year.

Copyright 2010 United Press Internationa

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