Sharp Increase on Annual Fees for Rewards Cards
Rewards credit cards are extremely popular amongst consumers. Heck, we here at www.bestcreditquote.com like them to. But be warned, they are becoming more and more expensive seemingly by the day.
A recent survey conducted by the consumer market research company Synovate shows a sharp rise in the amount of annual fees being charged. It’s a trend that looks to only grow stronger as time goes on as well.
The results of this survey show that in the first month of the fourth quarter of 2009, 36% of credit card issuers were charging an annual fee on their rewards credit cards.
Compare that with 28% for the third quarter of 2009 and 21% for the third quarter of 2008 and you can see how quickly that trend has accelerated. And every indication points towards more and more issuers charging annual fees for their rewards programs.
As of this writing the American Express Premier Rewards Gold Card was charging $175 per year as an annual fee. The American Express Preferred Rewards charges $125 per year. Those two cards are primarily travel rewards cards and they are traditionally more expensive.
As of this writing the Chase Freedom, Chase Sapphire and Discover More line of cards, all of which offer rewards, do not charge an annual fee. It will be interesting to see how long it takes before they start to charge a fee as well. Who knows, perhaps they won’t. We’ll just have to wait and see.
The reason for the spike in fees is actually quite easy to figure out. As credit card reform nears the ability for banks and credit card issuers to arbitrarily raise interest rates has been greatly curtailed. Therefore, issuers need to find new ways to raise revenue.
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