The new Credit CARD Act went into effect yesterday with many restrictions such as universal default, double-cycle billing, and overlimit fees. Aaron McPherson has a great post on the Credit CARD Act and his thoughts on its implications. 

There were many professional opinions of how the customer will be impacted (the consensus – negatively via increased fees) and much talk about personal experiences. I’d like to look at two institutions that have generated some buzz – Citi and USAA, each at opposite ends of the spectrum.

Citi is taking a beating in the social media world from consumers upset with new fees for no additional value added.  One consumer (a Money reporter) recounts in an article her personal experience with Citi, a pretty entertaining read. Citi’s spokesman Samuel Wang is quoted saying, “We understand that customers can be frustrated by new fees, especially in difficult economic times. However, this action is necessary given the increasing costs of doing business.” I believe the result at Citi will be credit-worthy customers closing their underused accounts to avoid these fees while those less fortunate customers with balances and fewer options for credit will be stuck. This is consistent with the consensus mentioned above.

USAA, on the other hand, has been proactive with social media forces, encouraging their members to contact them so they can walk them through a breakdown of the regulation and their new charges, as stated on their Facebook page. The same message appears on their homepage. Now they aren’t saying they aren’t charging fees, but they are saying they’ll help you understand what those fees are. There’s the value add! And based on the comments from members on USAA’s Facebook page, their members are quite satisfied. One comment says, “Love how USAA always looks out for our best interest."

My observation – social media and online resources are very powerful and FIs must learn how to proactively manage this channel, particularly in the wake of negative events as we’re seeing as a result of the Credit CARD Act. What are your thoughts and experiences as either a banker or consumer?