Citi adds annual fees to some credit card accounts
The addition may help boost credit card issuer's bottom line
Citi is initiating annual fees on certain credit card accounts as a way to compensate for increasing credit card losses.
After a slew of subpar quarters in the past couple of years -- six in the red, according to the Wall Street Journal -- Citigroup Inc. is joining the ranks of other companies exploring new methods to regain lost profits in the volatile credit card market.
Fees will vary by account, and in some cases, may exceed $30. A Citi spokesman declined to comment on which accounts would experience the modifications, but said that only a small number of customers would be affected by the change.
"We have adjusted pricing and card terms for some customers as part of our regular account reviews," Citi spokesman Samuel Wang wrote in an e-mail. "This is an ongoing process to ensure we offer terms, interest rates, credit lines and products based on individual needs and risk profiles. These changes also reflect the dramatically higher cost of doing business in our industry as we work to preserve the broad availability of credit."
Affected customers have already received notification of the pending changes. Cardholders who wish to opt out of the annual fee will have approximately two months to do so. They may then pay off their balance under existing terms and conditions.
The addition of annual fees may be the latest in an ever-increasing list of techniques to stave off negative bottom lines.
Other banks have attempted to increase income by adjusting rewards programs, raising minimum payments or increasing interest rates.
"We continue to assess the changes needed in this environment to support the ongoing extension of credit," Wang wrote.See related: Research: Credit card mail offers with annual fees return, Citi offer: Volunteer for credit limit cut, get a bonus, Credit card interest rates keep moving higher
- How to quit smoking and improve your finances – Quitting smoking can improve your financial health. If you stop spending $10 a pack on cigarettes, you can put that money in savings, toward college costs or even pay for a car or a home. Plus, you'll spend less on health care and insurance costs ...
- How to help the homeless with your credit card – How can you help the homeless with your credit card? Hungry people need to eat, so offer to pay for a meal. Or set up a recurring charge to a nonprofit serving meals or providing medical care for the homeless ...
- Credit card issuers - contact information – Toll-free customer service numbers for the major credit card issuers and banks. Log in to pay bills online and check your account balance ...