Banner
  • Revenue Cycle Management
  • COVID-19
  • Reimbursement
  • Diabetes Awareness Month
  • Risk Management
  • Patient Retention
  • Staffing
  • Medical Economics® 100th Anniversary
  • Coding and documentation
  • Business of Endocrinology
  • Telehealth
  • Physicians Financial News
  • Cybersecurity
  • Cardiovascular Clinical Consult
  • Locum Tenens, brought to you by LocumLife®
  • Weight Management
  • Business of Women's Health
  • Practice Efficiency
  • Finance and Wealth
  • EHRs
  • Remote Patient Monitoring
  • Sponsored Webinars
  • Medical Technology
  • Billing and collections
  • Acute Pain Management
  • Exclusive Content
  • Value-based Care
  • Business of Pediatrics
  • Concierge Medicine 2.0 by Castle Connolly Private Health Partners
  • Practice Growth
  • Concierge Medicine
  • Business of Cardiology
  • Implementing the Topcon Ocular Telehealth Platform
  • Malpractice
  • Influenza
  • Sexual Health
  • Chronic Conditions
  • Technology
  • Legal and Policy
  • Money
  • Opinion
  • Vaccines
  • Practice Management
  • Patient Relations
  • Careers

Credit Card Annual Fees - A Comeback?

Article

Although Bank of America refers to its new credit card fees as a “test,” many industry observers believe the move to be the beginning of a trend, as banks act to recover lost revenue.

Back when banks and other credit card companies were eager to sign up card holders, one of the lures was a no-annual-fee rewards card. When federal legislation crimped the card issuers’ revenue stream, consumer advocates predicted a return to annual fees. Although a full-scale resurgence of annual fees hasn’t happened yet, there are signs such fees may be making a comeback.

The first to announce an annual fee on some of its rewards cards was Bank of America, which will impose fees ranging from $29 to $99 a year on some rewards card accounts, starting in February. CitiGroup is also planning to impose annual fees on some cards starting next year. Although Bank of America refers to its fee as a “test” and says that fewer than 1% of its credit card accounts will be affected, many industry observers believe the move to be the beginning of a trend, as banks act to recover revenue lost as a result of new credit card rules.

The fees could present a double whammy for card holders since the only way to avoid them would be to opt out, which would effectively close the account. Consumer advocates point out that closing credit card accounts often lowers a card holder’s credit score, because it usually results in a higher debt-to-credit ratio, a prime factor in figuring the score. Closing the account would also wipe out any “good” credit history, like on-time payments, that goes with the account. The net effect of a lower credit score could be higher interest rates on mortgages and other loans.

Related Videos
Victor J. Dzau, MD, gives expert advice
Victor J. Dzau, MD, gives expert advice