I was just listening the morning radio show that I normally wake up to and they pulled me out of my slumber a little quicker than usual when they started talking about credit cards. Apparently since all the new rules for credit card companies go into effect in a few months, many of them are starting to try some new ways to squeeze out some more profits.
The DJ’s on the radio were very offended by some of these new fees – I guess I am not that surprised, but they do create a good case for getting rid of your credit cards.
1. Annual fees for customers who have never had a late payment
This is pretty funny. Some credit card companies are punishing you by charging a $29-$99 annual fee if you do NOT have a late payment in a 12-month period.
2. Fee for never carrying a balance
If you open an account just to get a t-shirt, gift card, etc this one might bite you. Some of the companies are now charging you a fee if you never use the card.
3. Fee for not spending enough each year
Taking the previous one a step further – some Citi cards are going to start charging fees if you don’t spend $2400 in a 12 month period. The first thing that comes to mind is Balance Transfer!
What about your Credit Score?
Most people know that keeping credit cards open that you have a long history with is good for your credit score. With all these inactivity fees increasing, it becomes a little bit of a Catch-22. If you close them you will slightly ding your credit score, and if you keep them open without using them you will have to pay. Needless to say, there are going to be a lot of upset customers.
That sounds like reason enough to be done with credit cards. So if you want to break out of the credit card cycle, I suggest negotiating with the credit card companies to reduce your interest rates.
{ 7 comments… read them below or add one }
Dear Citi:
Well ex-CUUUUUUUSE MEEEEEEEEEEEEEEEEEEEEEEEEEEE!!!!!!!!!!!!
do you have any links to show for sure this is happening? I trust you know but other may still scoff.
Scoffing is acceptable – because, like I mentioned, I heard it from the radio DJs – so I don’t have any hard evidence to back it up…
A couple years ago, I paid my Capital One Credit card late. They socked me with a late fee and interest, which I deserved, so I paid it. Next month, they charged me interest again (I always pay the bill in full every month). I called them and they explained that the policy was that you had to pay the bill in full for 2 months before they stopped charging interest.
I explained that my previous card didn’t do that and I would have to close my account. After talking with the cancellations department they waived the charge.
The point is, that I’m not afraid to “ding” my credit score. It’s just a number. I may by a car in the next year or so and I will probably take out a loan, but I’ll make a sizable down payment (25% or more) and I will shop for rates. If I buy a house (mine is on the market), the same is true.
Unless someone can convince me that canceling a credit card is really going to cost me, I’m not going to give in to a credit card company.
If true, these are three more reasons why credit cards are bad, bad things.
How absurd can this get?
I watched the news in the morning(NBC today) and they were listing all these charges that will apply if you pay off your credit card, do not maintain a certain revolving balance, blah blah blah. I feel like randy, It’s over for me with these credit card companies… i refuse to be a slave any longer!!
more reasons to stop using credit cards.