“Charge More Or Pay” Says Citi Bank To Its Credit Card Customers

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Leslie McFadden of Bankrate.com reports that beginning on April 1, Citi will begin charging an annual fee of $60 to those credit card customers who charge less than $2400 a year. Citi is not alone in this trend: other banks, such as Bank of America will also be jumping on the fee bandwagon.

Charging annual fees, at least, on some of its customers may be part of the banks’ way of coping with the new credit card law that will go into effect on the 22nd of this month. This is not surprising, but is quite sad nonetheless. 

 

While the new law restricts interest rate increases, it says nothing about fees other than that any fees must be disclosed and that the customer must be given the opportunity to "opt out." of them.  This is fine if you haven’t been running a balance, since you can just close your account and walk away. But what if you are running a sizeable balance that you can’t afford to pay all at once? Suddenly your right to opt out is a right in name only. Indeed, you have the right, but circumstances bar you from exercising that right.

One way people with decent credit and high balances may find to get out from under being trapped by high fees, is to transfer the balance to another credit card. People whose credit is blemished or who can’t transfer balances won’t be so lucky.

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