What to Do If You Suddenly Get Hit With Credit Card Fees
Credit card issuers are hitting back hard against record default rates and credit card reform in the form of higher interest rates and annual fees.
Bank of America has announced it will charge some of their cardholders an annual fee beginning next year while Citigroup has already started charging annual fees to cardholders that don’t charge at least $2400 a year on their credit card.
Still other credit card companies are charging inactivity fees for people that don’t use their card enough, in their arbitrary estimation anyway.
Surely the banks and credit card issuers have a right to set rules for their products as long as they’re not predatory or abusive towards their customers. Some however, take exception to these sudden fees because they were never included in the terms and conditions of the credit card applications when they were completed.
There are some things that cardholders can do if they suddenly face an annual fee, or see existing fees increased.
Call Your Credit Card Company
In some cases credit card fees are raised due to a negative mark on your credit report. Before you contact your credit card company to question it or complain make sure you get a copy of your credit score to make sure it’s clean.
If in fact there are no negative marks on your credit record then by all means, point that out to the representative you speak with. If you don’t get anywhere with that particular person then ask to speak to a supervisor.
Be forceful yet polite in reminding them that you are a good customer that should be valued and not taken advantage of. You may also want to remind them that they are not the only credit card company that you can be doing business with.
Is the Card Worth Having
Usually fees are charged with rewards-based credit cards. These days finding a rewards card with no annual fee is getting rather difficult. What you need to do is decide whether or not the rewards program is justified in relation to the fees you are being charged.
If you realize that rewards points are not all that valuable to you than perhaps they should look for a card that doesn’t have a rewards program. In most cases basic cards without rewards programs do not charge fees, but you certainly must verify that.
Look for a Better Deal
While it is becoming increasingly more difficult to transfer a balance or even get approved when you apply for a credit card, if you do have a strong credit record then you still have plenty of options as far as taking your business elsewhere if and when you find a better deal.
If you do find more favorable terms with another credit card issuer make sure you exhaust all of your rewards points before closing out the account with your current company. Those points can be valuable and there’s no sense leaving money on the table.
You must also realize that when you close down a credit card account it can affect your credit score. Something called the “credit utilization ratio” is used to determine your credit score. It is based on how much credit you have outstanding and how much of the credit is currently being used.
If you do decide to switch get approval on the new credit card first and then close down the old account. If the credit limits are comparable then your credit score should not be affected at all.
It is vitally important that you realize as a consumer that you do indeed have rights. Many times the credit card companies will amicably work with their customers in order to keep them happy and keep their business.
A little known secret in the credit card industry is that it is very expensive for them to pick up new customers. They literally pay out hundreds of dollars for every new qualified customer they gain. It’s a lot cheaper to keep the ones they already have.
It is important to realize that you must speak up and be proactive in protecting your own financial interests because no one else is going to do that for you. When people act as advocates for their own cause many times surprisingly good things result.
Related Information:
- Credit Card Issuers Getting Creative with Their Fees Credit card issuers are finding new ways to charge their account holder's fees...
- Higher Credit Card Fees Introduced By Banks The trend is not good for credit card account holders as banks continue to raise fees on them....
- Chase Decides To Raise Credit Card Fees Chase, like many of their counterparts, are raising fees on cardholders....
- Unexpected Bank Overdraft Fees To Be Eliminated Unexpected ATM overdraft fees are now prohibited by the federal government....