A recent survey reveals that of all the costs associated with credit cards, annual fees are the most despised.
Of all the costs consumers tolerate for access to plastic, annual fees inspire the most hatred, according to a survey by Auriemma Consulting Group, a management consulting firm.While some credit card fees are accepted by most cardholders as an unavoidable part of doing business, others are seen as overkill. Charges for account initiation and inactivity fit into the latter category, along with annual fees, which topped the list of charges that most enrage credit card users.
“While people, predictably, dislike fees in general, they are particularly resistant to upfront fees for services which they feel entitled to receive,” says Nancy Stahl, editor of Cardbeat, Auriemma’s research publication. “Respondents reserved their strongest condemnation for annual fees.”
Even generous credit card rewards programs aren’t enough to make consumers overlook annual fees, according to the survey. The first thing consumers check for when applying for a new credit card is an annual fee, and the majority of survey respondents said they would be willing to sacrifice the rewards for the promise of no annual fee or a lower interest rate.
Yet, like them or not, annual fees may be a fixture in the future, says Stahl. She predicts customers who don’t carry a balance, and thus aren’t profitable to banks, may find themselves strapped with annual fees as card companies search for ways to offset costs of the regulations imposed by the federal Credit CARD Act of 2009.
As of mid-2010, about 20 percent of U.S. credit cards charge an annual fee.