It's not your imagination. American consumers are being squeezed with credit card fees. Over the past two years card issuers have jacked-up late payment fees and over-limit fees, created new fees, and have lowered the threshold when such fees are imposed. The "fee frenzy" is translating into the bottom line according to CardWeb's CardData service. Based on year-end 1998 data, cardholder fee income grew three times more than interest income last year. Over the past five years, cardholder fee income surged by nearly 160%, from $7.3 billion in 1994 to $18.9 billion in 1998. Meanwhile cardholder interest revenues grew 67% over the same period, from $34.8 billion to $58.1 billion. Late payment fees and over-limit fees have been the driving force in the increased fee income. Since 1994, late fees and over-limit fees have doubled in actual dollar averages. Late fees averaged $11.97 in the summer of 1994 and hit $24.02 this summer. Over-limit fees have grown from an average of $12.57 in June of 1994 to $23.44 for June 1999. Additionally most major issuers have reduced the late payment grace period from 14 days to 0 days. Five years ago about 70% of the industry imposed late fees and over-limit fees. Today more than 90% of the industry charges late fees and about 85% charge over-limit fees.

     FEE  INCOME                    INTEREST   INCOME  
1998  $18.9B  (+28.0%)          1998  $58.1B   (+9.4%)
1997  $14.8B  (+48.0%)          1997  $53.1B   (+1.5%)
1996  $10.0B  (+20.5%)          1996  $52.3B  (+23.9%)
1995  $ 8.3B  (+13.7%)          1995  $42.2B  (+21.3%)
1994   $ 7.3B    NA             1994  $34.8B      NA
  B-billions

  Source CardData (www.carddata.com)