Here’s a report to make your blood boil:
Citigroup, meanwhile, has started charging annual fees to card holders who don’t put more than a specific amount on their cards, typically $2,400 a year. Other banks are charging inactivity fees if customers don’t use their credit cards during a specific period of time. You heard that right: You could be spanked for staying out of debt.
I no longer have a citibank credit card, since Bank of America bought the card I had from Citi. But BofA is in on the fee game too:
Starting next year, Bank of America will charge a small number of customers an annual fee, ranging from $29 to $99.
Fees are not surprising, but annual fees are. I never understood why people had credit card accounts that charged an annual fee. I don’t understand charging fees to people who pay off their balance either. I’ll switch to using cash or debit, thank you very much. The day I see an annual fee on my credit card is the day I cancel the account.
It’ll hurt a little. After all, I do get rewards for using my card for most of my major purchases. And closing the account will have a negative impact on my credit score, but fees will have a negative impact on my savings.
I’m fortunate enough to have gotten my financial house in order a while ago, so I really don’t need a credit card and haven’t carried a balance in years. But what about those that do? Let this be an added incentive to pay that debt off quickly!
This is, of course, the result of the recent consumer credit legislation that limits the credit card companies ability to raise interest rates and charge late fees.
The USA today article suggests the following as potential actions if you’re faced with new fees, or sudden fee hikes:
- Weigh the benefits of rewards against the annual fee.
- Call and complain.
- Leave.
Calling and complaining might help if you have a good payment history, and solid credit score. Leaving is really only an option if you don’t have a balance, or you can get a better offer (i.e. the same or lower rate, and no fee) some place else.
I said above that I’d choose “Leave”, but I suppose I’d try the complaint route first and see if BofA would be willing to work with me.
[...] that would ban fees on people who don’t carry debt. This is a direct response to some credit card companies imposing fees on responsible customers who pay off their balance every [...]