Citi Adds $60 Annual Fee to More Credit Card Accounts

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Editor’s Note: This post is from partner site LowCards.com.

One week before the CARD Act goes into effect, Citi has added an annual fee to more accounts on many of its popular credit cards.

Many Citi cardholders are receiving letters about a $60 annual fee that is being added to their account effective April 1, 2010. If consumers make $2,400 in purchases during the year, then the annual fee will be credited back to their account.

It appears that Citi’s test of adding an annual fee to a small percentage of their customers in August of 2009 proved successful for the issuer. At that time, Citi began charging some cardholders an annual fee of $30 to $90 unless they spent at least $2,400 per year. Now a far greater number of customers are receiving this notice.

“The reason we are making this change is to maintain the quality of our service amid the rising cost of doing business,” said Ken Stork of Citibank in a letter to the cardholders receiving this notice.

“This is a very concerning sign for credit card consumers and it is further evidence of how issuers will react in 2010. Issuers are having to find creative ways to generate revenue. The tough economy, the high default rates they have experienced, and the enactment of the CARD Act have combined to make it a very stressful period for the issuers,” says Bill Hardekopf, CEO of LowCards.com and author of The Credit Card Guidebook. “Adding annual fees is one way to generate new revenue. Consumers need to watch for this on their accounts since only about 20% of the credit cards currently carry an annual fee.

“If you spend at least an average of $200 per month on your Citi card, this may not be a big deal. However, it is a problem for the cardholders who charge less than $2,400 per year, who keep the account open for emergencies or to boost their credit score. Other credit card issuers may follow Citi and add a similar fee.

“If the annual fee will be added to your account, contact the issuer to ask them to waive it. This may not work, but it doesn’t hurt to ask. You can opt out of the card and close the account. If you have a good history with this card and it is building your credit score, shift some of your spending to this card to reach the $2,400 limit and pay it off each month.”

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Comments & discussion

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  • Guest

    "This may not work, but it doesn’t hurt to ask"

    Yes, it does. Groveling, begging, and pleading debase your self-esteem. They don't care. Been there, done that. Your pleas and case that you are a long-time (this case, eighteen years) customer will have no impact. Do not do business with scumbags. Run, do not walk, towards the exit.

  • Guest

    "This may not work, but it doesn’t hurt to ask"

    Yes, it does. Groveling, begging, and pleading debase your self-esteem. They don't care. Been there, done that. Your pleas and case that you are a long-time (this case, eighteen years) customer will have no impact. Do not do business with scumbags. Run, do not walk, towards the exit.

  • citi hater

    citi are scum bags! i just called and “opted out” of this and thus closed my account. When the ceo “received $10.82 million in 2008″ and they claim the increase is to “maintain the quality of our service amid the rising cost of doing business” they can kiss all my asses as i move my money to another company.

  • CC

    My citibank card has been closed (day I got the letter) no matter the 11 years with them and no balance, but why keep something open I rarely use. Credit score will take a hit, which sucks. I'll stick with my regular CC with USAA, awesome rewards and I can't beat the rate! It's funny that the rep at Citibank stated 'we hate to lose a member with 11 years.' Well I guess those years didn't matter much…did it.

  • Guest

    How many more CC companies will add an annual fee? I keep my cards for “emergiencies” basically and wonder how many turned off cards will affect my currently excellent credit score if I begin to close them. I do not feel I should have to alter my $$ habits to keep them in business. Maybe these new fee tricks due to new laws will create a different sort of reflection on our credit reports as more people opt out of their agreements!

  • Guest

    If you go to the CitiBank web site there are a number of no fee cards listed. When I asked to switch to one of these, I was told they were only for “New Customers”. Guess those idiots at Citibank don't want to keep their current customers. No wonder they continue to lose billions. I closed my 16 year account. My 820 credit rating might dip a tad but there is no way I'll ever do business with these people again. Lots of other banks out there.