That Makes Me Stabby: Credit Card Annual Fees

Last week, the news was abuzz about that Bank of America and Citigroup had followed through on their threats to impose new annual fees. Several other banks rushed to announce that they won’t be imposing fees. The very idea that one of my cards could slap me with a new fee just for having the card in my wallet and not using it really makes me stabby.

My Policy about Annual Fees

I do pay an annual fee for my miles credit card from American Express. I also receive above-average benefits and service from them. I knew about the fee and agreed to it when I signed up for the credit card. At the time, I also needed a credit card for Costco, and decided that accruing miles was a good trade-off, so I’d opt for the miles card with a fee instead of a fee-free card.

I refuse to pay an annual fee for the rest of my credit cards. They don’t provide me rewards or additional services of any kind. All of my husband’s cards except one, his oldest card, are fee-free. So far, they’ve always waived the fee when he calls to ask. If they refuse next time, we’ll cancel the card.

Why the Bank Thinks We Should Pay Fees

So far, we haven’t received a notice that we’ll be charged a fee, but we’re in the “high-risk” group. High-risk meaning that we rarely use the card and pay it off in full every month that we do use it. Apparently they’re not making enough money off people like me. Honestly, if I don’t use the card, how much money does it cost to keep me around?

I understand that credit card issuers are strapped, but they chose to extend too much credit, which allowed some customers to take on too much debt. The banks did this so they could collect over-limit fees and late fees and interest and a slew of other fees. The fact they’re getting busted for their greed is not my problem. I paid off my debt. I’m a responsible card user. They make billions of transaction fees. They don’t need an additional annual from me.

The Annual Fee is a Punishment

Basically, banks are punishing their responsible customers for being responsible. True, they don’t stand to lose much if I leave, but they do stand to lose a lot of money if hundreds of thousands of responsible customers leave due to annual fees. I really don’t think they’ve thought this through. Punishing responsible customers will only result in an increase in the percentage of irresponsible customers in their credit pool. How is that a good idea?

What I Plan to Do

If we do receive a notice or spot the charge on a bill, our first step will be to call and ask to have it waived. With one card, we’ll point out that we have multiple other accounts with the bank and have been good customers for over two decades. With the other, we’ll point out that we’ve been good customers and do spend some money with them.

If that doesn’t sway them, we’ll simply close the accounts. Yes, our credit scores may take a hit, but we already have so much credit that I’m not terribly concerned. The dip will be minimal and short-lived. We still use substantially less than 30% of our available credit, even without two of our credit cards.

I agree that the way Americans use credit has to change, but banks should be encouraging responsible credit card use, not looking for new ways charge us fees. Especially if customers accepted the card when there wasn’t an annual fee attached to it. They can’t just change the rules in the middle of the game. Well, technically they can, but it’s bad business. I’m pretty sure they’ll discover that soon enough. Then they’ll be the stabby ones.

Have you been slapped with a fee? What did you do about it?

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