What Do Credit Cards and Mobile Phones Have in Common?

Yes, they're both sometimes made partially of plastic, but that's not it. Their over-limit fees have both now grabbed the interest of regulators. You might recall that the credit card bill from last year included new rules regarding the fees that banks charge customers who exceed their credit limit. They wanted cardholders to be more aware of these fees, so they can have the option of not incurring them. A new regulation may soon apply to mobile phone overage fees that also benefit consumers who face fees from going over their monthly minute allotment.

Here's Todd Shields at Bloomberg explaining:

The Federal Communications Commission will propose rules tomorrow and may take a final vote in coming months, Chairman Julius Genachowski said in an interview. Subscribers may get voice or text alerts when they use too many minutes in a month or place calls using more expensive networks outside the U.S., the agency said in a summary distributed by e-mail.

This is actually almost identical to the worry expressed by lawmakers with credit card limits. In a similar way, the FCC doesn't want mobile phone users to unknowingly incur big fees for going over their monthly minutes balance. Of course, they are certainly entitled to do so -- just like they still can go over-limit with credit cards -- but they should be warned first.

The mobile phone rule may be far less aggressive, however. With credit cards, you had to opt-in for over-limit fees, and those fees would have a strictly imposed ceiling. For mobile phone monthly minute limits, you'll probably just be warned, though the FCC is also considering fee caps. So you may still be able to incur hefty fees, and carriers may not be forced to allow you to opt-out of going over-limit. It depends on how the final rules look.

As with credit cards, the principal of providing consumers with more information seems sensible, though not entirely necessary. Prudent mobile phone users, like prudent credit card users, could already check their balance throughout a month to see how close they are to hitting their limit. Sure, that's a hassle, but you don't actually need the phone company to warn you.

Of course, consumers will still generally welcome the change. It allows them to avoid worrying about how close they are to hitting their limit, and will certainly allow some to escape the fees that would otherwise result. And naturally, what's good news for consumers is bad for the service providers, who will likely have reduced overage fee income as a result of their customers' improved awareness of nearing their limits.