Discover, American Express: Eliminate one fee, raise another


Beginning in October, American Express and Discover will eliminate the over-the-limit fee, a major charge that affects millions of consumers. The $35-$40 fine, which kicks in when customers exceed their credit limits, has been in use for about 25 years. It is one of many charges that was targeted by April's Credit Card Accountability, Responsibility, and Disclosure (C-CARD) Act.

Although it dealt with numerous aspects of the credit card industry, C-CARD specifically attacked this fine in several ways. The law allows customers to stop payment on any charges that would result in an over-the-limit fee, only allows banks to charge the fee once during a given billing cycle, and prohibits them from charging it in two consecutive cycles -- unless the cardholder has gotten another extension in credit. Effectively, this keeps card companies from repeatedly fining customers for the same over-the-limit charge.