Having No Annual Fee……at a Cost?
| August 21, 2009 |
In an earlier post entitled "It All Adds Up, Credit Cards with Annual Fees", I briefly discussed how many credit card issuers were thinking about adding annual fees to their credit card offers due to the changes made by the CARD Act. According to a recent article in CNN Money, it now looks like the first credit card issuer to add annual fees has been named and it is Citi Bank.
How much will this annual fee be? While there is no definitive answer, reports from cardholders have shown that they range from thirty dollars and above. At the moment Citi is experimenting with a range of annual fees, and a spokesperson stated that they are based on Citi’s regular account reviews. For the most part Citi has stated that these annual fees will only be added to a select group of consumer, although they have not mentioned the percentage of accounts that will effected.
From reports by cardholders, it does seem like this fee may be waived if you spent more than $2,400 on your Citi credit card. In my opinion, for some cardholders this is not a problem as more than this will be racked up on their cards. However, for other cardholders that just charge something every now and then it could very much be a problem as they are just trying to keep accounts active for FICO Score purposes.
Only time will tell if Citi Bank credit cardholders will stay disregarding the fee, or if they will leave to other credit card issuers that offer similar card options without an annual fee.
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