A leading credit card company is offering a new program to educate consumers.
Bank of America has decided to launch a special project aimed at informing customers about various fees, including credit card fees and ATM fees.
Bank of America spokesman Bruce Hammonds told the Associated Press, “Our research shows that if we equip consumers with this account information, they become more empowered to manage their finances and more satisfied with their banking experience.”
Financial experts say the concept behind such educational programs is quite simple: the better informed consumers are, the more likely they are to make wise decisions regarding their finances. Because of the complexity of credit card accounts, many customers may be unaware of the various “extra” charges they may encounter on their monthly bills. If they know in advance what to expect, they are less likely to incur charges that they cannot afford to pay.
Consumer education programs also make sense from the viewpoint of credit card companies. Informed customers are often happier customers—and happy customers are more likely to build a solid relationship with a credit card company. In the end, consumer education can lead to enhanced profits for the credit card issuer.
As part of its consumer education efforts, Bank of America is also introducing special e-mail and cell phone alerts. These alerts will let consumers know when they’ve come close to reaching their credit card limit—or when their monthly payment is due. Such alerts may enable consumers to keep a closer watch over their accounts, making it less likely that they will max out their credit cards.
Still, some financial experts may argue that credit card education is not enough—that credit card issuers should work to reduce the amount of fees they charge. However, in today’s highly competitive credit card climate, companies may balk at reducing or eliminating fees.
The bottom line is that such fees help credit card companies make money—and, after all, that’s what they’re in business for.
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