Citi -- New Annual Fee

[Anonymous]

Well, for the first time, I got a letter from a credit card adding an annual fee...

"We're writing to let you know about an important change we're making to your acount.  Effective April 1, 2010, an annual fee of $60 is being added. 

The reason we are making this change is to maintain the quality of our service amid the rising cost of doing business.  However, because we value you as a customer, we wanted to give you an opportunity to have the annual fee credit back to your account.  

Here's how it works.  Each year, we'll credit the $60 fee back to your account once you have made $2,400 in purchases during that year...."

It goes on from there.  Are you kidding me?  I don't have credit cards with annual fees, and I'm certainly not going to have one where I then need to monitor it during a year that's not a calendar year, but from April 1-March 31 to make sure that I've spent $2,400 to get my $60 back, which I would have already paid.  Oh no. 

I called in and because I have 2 Citi cards attempted to get the available credit from that card transferred to the other one.  First after waiting on hold and then being hung up on, I then got a guy who I had to explain what I wanted 5 times before he stated he understood, then put me on hold and came back to tell me that I can't do that.  When I asked why, I got the standard "That account isn't eligible."  When I stated it was a few months ago, I got told we review accounts all the time and now it isn't."  

So I outright closed the account.  I forget to do things on time all the time, so while it would have been smarter to wait until my $29.95 recent payment posts next week, my luck I'd forget and get a $60 Annual Fee charge.  So, while I realize that this may tank my credit until there's an update.  But I'll check next month, and if it's an unacceptable tank I'll call and see if they will update early. 

But seriously, they've earned hundreds if not thousands of dollars off of me over the last 4 years combining this card with the other Citi card I have, as I used to carry high balances on all my cards.  Apparently they decided that the merchant fees they get off of me is not enough.  

I'll close the other account if they do that as well, which will hurt since that one's been open 10 years, but I'm not paying annual fees simply because I PIF every month now.  

Message Edited by woopah on 02-12-2010 10:14 AM

[YoungEntrepeneur]

You could've used the card to pay your bills until it added up it to $2,400 or more. That way, they would've refunded the $60 AF and you would've been able to keep the account open.

Message Edited by YoungEntrepeneur on 02-12-2010 11:09 AM

[Anonymous]

True, but first I would have had to pay that $60 fee, losing any interest on that $60, and I would have lost the cash back rewards I get from Discover and Chase Freedom, and I would have had to keep track of how much is spent from April 1 - March 31 to ensure that I spent the correct amount, before they credited the fee, not given me my money and interest back. 

To me, not worth the trouble, hassle, and loss of money, simply because they want to charge a fee, after they took a bailout from the government.

[YoungEntrepeneur]

Was it one of your oldest accounts?

[Anonymous]

Nope, not yet 4 years old since I got it some point in 2006.  My oldest is 11 years old. 

[FocusOnFICO]

Woo--I look at your situation and the steps that you have taken as a good route to take, with one note.  It is important--if you need to--to replace the credit line with another of a similar amount to keep your util where you desire it.

Considering your credit cards mentioned, it would not have made sense to spend $2,400.00 to have the fee waived.  You moved in the right direction.

I will most likely be in the same situation shortly, as my one-year with CitiCards is coming up next week.  If I encounter the same situation, I will do exactly what you have done.

You can most likely replace the lost line with a fine cu card that will not give you similar issues.

[YoungEntrepeneur]

+1 on the CU card suggestion.

[Anonymous]

Citi tested various annual fees on about 500,000 accounts last August. The fees seemed to be primarily aimed at accounts associated with Thank You points rewards ...

[armywifey85]

The fees and ratejacks are coming for all, by this time next yr when all the banks have lost even more on the loans for commerical real estate they will be out for blood.  It's gonna get worse so I would'nt leave any balances on any of those credit cards. I would run as fast as I could to a credit union. The small banks are gonna take a big hit next yr or so.  A lot of renters will be forced out due to the foreclosures on rental prop. It's gonna get messy those loans are gonna come due for refinance  starting next yr and the banks are not gonna loan them the money due to them being upside down... It's already starting here where I live.

[Uborrow-Upay]

armywifey85, I believe you are right.  The commercial real estate carnage hasn't really hit yet, but when it does, all h*ll will break loose.

woopah, when I first read your post, I thought you over reacted.  Then I re-read it, and I think you made the right move.  You'd never really get that $60 back, they'd whack you again for it the following year, and the next, and the next.  And you'd lose out on the other cards' rewards.  Plus nothing made on the $60.

(The math is working for me now...)

Message Edited by Uborrow-Upay on 02-12-2010 10:35 PM