Other Credit Card Programs - CITI to start charging fees if you don't use your card enough..

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.

See full article here: http://www.usatoday.com/money/perfi/columnist/block/2009-10-19-bank-of-america-card-fee_N.htm

For the churners amongst us this shouldn't be an issue- get card, charge $750, cancel card after miles post. But for many people this will be a problem/concern.

it is a big problem for me. i have too many credit cards and not enough money to spend on them. (it is tough enough to try to spend enough on new cards for the signing bonus, right now, working on get 15K spent on my new spg amex).
i should just cancel some cards. but the problem is that the older cards tend to have few rewards but have the most effect on credit history.

but my citi cards are just useless anyways. :D

How widespread is this policy? I don't think I have received any notification from Citi, but maybe it is buried in (very) fine print somewhere.

I think this may finally be the reason for a lot of us to clear out locked drawers from those unused plastic. But again, we don't want to lower our available credit which could have an adverse effect on our scores. It would be really interesting to see how this pans out. Will be keeping a close watch on the developments.

I think this may finally be the reason for a lot of us to clear out locked drawers from those unused plastic. But again, we don't want to lower our available credit which could have an adverse effect on our scores. It would be really interesting to see how this pans out. Will be keeping a close watch on the developments.

yeah, if we would have foreseen this we would have consolidated all our CLs with a single issuer on our oldest and/or most used card; but as it is, I have 20 Citi cards, 20 Chase cards.... canceling all of them is not going to help my overall credit score.

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.

See full article here: http://www.usatoday.com/money/perfi/columnist/block/2009-10-19-bank-of-america-card-fee_N.htm

For the churners amongst us this shouldn't be an issue- get card, charge $750, cancel card after miles post. But for many people this will be a problem/concern.

This has started in July 2009 with AT&T Universal Cards issued by Citi. I think I even reported this somewhere in this forum, but can not find it now. So this is not new, unless they are doing it across the board.

but as it is, I have 20 Citi cards, 20 Chase cards.... canceling all of them is not going to help my overall credit score.

WTH ? 40 credit cards?

BOA just told us they are instituting a $69 annual fee regardless of type of spend. :(

You could be spanked for staying out of debt.


Not exactly. You aren't being penalized for not carrying a balance, only for a dormant card. Also, my reading is that these fees apply only to cards which otherwise do not carry an annual fee.

Not exactly. You aren't being penalized for not carrying a balance, only for a dormant card. Also, my reading is that these fees apply only to cards which otherwise do not carry an annual fee.

Question: does anyone know when/if this is taking effect for Premier Pass cards, Professional cards or Citibusiness cards?

Not exactly. You aren't being penalized for not carrying a balance, only for a dormant card. Also, my reading is that these fees apply only to cards which otherwise do not carry an annual fee.

Time will tell. The new Fed. rules go into effect in Feb. I'm really interested in how it will all shake out. Banks are innovative about finding ways to tack on new fess, etc.

Just another way to make up for some of the fees they will lose beginning in Feb.

I had a bank tell me they were going to cancel my card if I didn't make a charge within the next 6 weeks after receiving the letter. I charged $2 :). I don't like that card but I have had it for 25+ years and don't want to get rid of it.

I would not welcome a policy such as this.

I have some older, no annual fee cards that I rarely or never use. But because they are older accounts, I think that they help increase my FICO score, so I don't close them.

I could keep these cards if it were only necessary to make a very small purchase to show activity. But it would be the death knell for these older cards if there were a substantial required annual spend, and that might cost me some points on FICO.

I would be interested in knowing the criteria or the condition thats the CC issuers implement in order to charge a fee. Until then we are just speculating.

<<Starting next year, Bank of America will charge a small number of customers an annual fee, ranging from $29 to $99. The bank has characterized the fee as experimental. But card holders who have never carried a balance or paid late fees could be among those affected.>>

Once again, the banks are proven to always do the stupid thing - so they are hoping the balance-carrying cardholders would pay enough interests / late fee, whatever, to be their profit centers, and then penalize those who pay off their balance every month, never late-pay, thus a much better credit risk... and then they would spend money to try to correct the defaulted accounts at 60 cents per dollar? :rolleyes:

Have they ever learned anything from the subprime debacle?

Besides, such actions would reduce the number of cards a person holds, so the banks may only collect fees on probably 20 to 30% of currently open cards - much less than their projections.

Any bank that pulled this nonsense on me would be met with some immediate churning action. It'll cost them a lot more than the annual fee they won't get.

WTH ? 40 credit cards?

in total we have over 100 pieces of plastic in the shoebox. I'm not sure how many actual accounts there are... well over 40, for sure. It is on my 'to do' list to whittle those down to a short list of those I use and those with long history and no fee, but I haven't gotten around to it yet. I doubt we're alone on this forum.

For those with mountains of CC sitting in our locked drawers, its going be some task to track all the changes associated with each card. Also, they will need to inform each account holder about these policies.

I think a lot of aspiring and established class action lawyers might be licking their lips and keeping a close eye on the developments. Lets wait and watch. It might prove to be a costly affair for the CC issuers for reasons more than one.

Although I only have a smallish number of cards by FT standards, I agree that it is going to be a chore reading through all the fine print that the card issuers send us. I expect a slew of mailings in the coming months as the card issuers look for creative ways to generate new fees. Those who simply toss those letters without reading them carefully will suffer the consequences.

The primary issue with cancelling cards is that each one you cancel does have a negative effect on your credit score.

The primary issue with cancelling cards is that each one you cancel does have a negative effect on your credit score.

It is all relative and does indeed depend on your personal credit history. In my case, I have closed 2 cards and my score increased by almost 20 points once that was reported to credit bureaus.

The primary issue with cancelling cards is that each one you cancel does have a negative effect on your credit score.

It is too broad a generalization, and is the way the banks wanted you to believe in the past when they wanted as large cardholder base as possible when easy money was abundant.

It is all relative and does indeed depend on your personal credit history. In my case, I have closed 2 cards and my score increased by almost 20 points once that was reported to credit bureaus.

Well said. ^

So far I did not get any notice but I guess I need to keep an eye on this.
Thanks for notice.