As I suggested back in a July post titled "Credit Card Charges Appearing," we'll now get to see what Bank of America and Citibank are willing to do to pry a few coins from the fingers of deadbeats:WCBSTV.com: Charged for Perfect Credit?
("Deadbeats," if you're a card company, are those greedy, black-hearted souls like myself who pay off their balances in full each month. Interest-free. Like clockwork.)
The gist of the article? Bank of America and Citibank are going to "experiment" by tacking annual fees of $29 to $99 onto the cards held by some full-balance-paying convenience users.
Yeah. As if we couldn't see this coming.
Bank of America said in a statement: "At this point we're testing the fee on a very small number of accounts and haven't made any final decisions." Citigroup is also trying out an annual fee with some card holders, and analysts expect more banks to follow their lead.
The banks are starting to charge fees to reliable customers in response to a slew of new credit card industry regulations that will limit when banks can hike interest rates. Cardholders who get a new annual fee notice in the mail will be in a no-win situation.
"They can either pay that fee or they can close the account, and if they have had the account for a while and they close it, they are potentially going to hurt their credit card score," said [Director of Consumer Research at CreditCards.com] Woolsey.
The banks are starting to charge fees to reliable customers in response to a slew of new credit card industry regulations that will limit when banks can hike interest rates. Cardholders who get a new annual fee notice in the mail will be in a no-win situation.
"They can either pay that fee or they can close the account, and if they have had the account for a while and they close it, they are potentially going to hurt their credit card score," said [Director of Consumer Research at CreditCards.com] Woolsey.
How far will the big banks take this ploy? I don't know — but I have this wacky suspicion that at least one of my household's cash-back reward cards are going to end up as a "test case."
Credit card companies call the fees an experiment. Whether they stick depends on whether customers are willing to pay for something that's been free for so long.
I'd really love to see this backfire on the suits at Citibank and BoA somehow. But really, since the taxpayer is effectively on the hook for whatever bad decisions grenade the balance sheets of the Too Big To Fail banks, we'll be paying for it one way or another.
So far this year, cash-back cards have netted my household just a tad under $306. Would we be willing to give up, say, $99 per year of that (as an annual fee) simply to keep (1) the convenience of use, and (2) our credit scores from suffering at the loss of aged accounts and credit lines?
Honestly, at just this moment, I'm not sure.
Hey, Citibank: Are you feeling lucky?
Labels: Credit Cards
