Citi Adding Annual Fee to Some Card Accounts
August 24th, 2009 by Kenneth Long
Consumer protection advocates predicted that card issuers would begin to create new fees to offset restrictions imposed by the Card Act of 2009. Citi becomes the latest to confirm that they will add annual fees to some of their credit card accounts.
Citi spokesman Samuel Wang confirmed that “a small number of Citi customers may be notified of an annual fee.” He released the following statement:
We have adjusted pricing and card terms for some customers as part of our regular account reviews. This is an ongoing process to ensure we offer terms, interest rates, credit lines and products based on individual needs and risk profiles. These changes also reflect the dramatically higher cost of doing business in our industry as we work to preserve the broad availablility of credit.
$90 Annual Fee
For cardholders that receive notification of this change in terms, they may expect an annual fee of $90. This fee would not be charged prior to September 2010 according to initial letters that have gone out from the lender.
Details of this new annual fee were initially reported by American Banker on Friday, August 21, 2009. Bankrate.com also confirmed that certain Citi accounts would begin to be assessed this annual fee. Ironically, that reporter’s own mother received one of the first letters.
Citibank declined to provide specifics on how they selected certain accounts for the account changes. There is also no known estimates on how many accounts might be affected by the new annual fees.
In a twist, accounts that will be subject to the annual fee may maintain the account and avoid the fee. To do so, they cardholder must charge at least $2,400 in a year in order to have the annual fee waived. Otherwise, they must opt out of the changes and relinquish all account privileges to avoid the fee.
Citi is not alone in its quest to generate new sources of income from its existing accounts. Most analysts expect to see annual fees and other new charges added to cardholder agreements from most major credit card issuers.
This entry was posted on Monday, August 24th, 2009 at 10:15 am and is filed under Consumer Protection, Credit Cards, Credit Cards: Citibank. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.
