bank rates

Annual Fees On More Credit Card Offers

Credit card companies sent out fewer solicitations for new customers in the first three months of the year — only about a third as many as in the first quarter of 2008.

But more of those offers required customers to pay an annual fee if they signed up — 27% versus 18% last year, according Mail Monitor, a direct mail tracking service.

mailbox full of applications

The fees ranged from $24 to $72 a year and reflect what could be a new trend — more cards charging more customers for the privilege of being in their wallets.

Lenders are looking for ways to cover losses from a growing number of defaults, and the Credit Card Accountability, Responsibility and Disclosure Act of 2009 will limit their ability to raise other fees and interest rates when it takes effect in February.

Since only about 20% of all credit cards currently charge an annual fee, it’s an obvious way for the banks to boost their revenue.

Three of the four most recent credit card applications to land in the Bankaholic mailbox — all for reward travel cards — include annual fees.

The No Hassle Miles Ultra MasterCard from Capital One was the exception. It proclaimed “NO ANNUAL FEE” in big red letters and offered the lowest, variable interest rate — prime plus 6.74%, or 9.99% right now.

The AirTran Airways A+ Visa Signature card from Barclays Bank included a $39 annual fee and an interest rate of prime plus 10.99% (currently 14.24%) or prime plus 13.99% (currently 17.24%), depending on your credit history.

The Southwest Airlines Rapid Rewards Visa Signature card from Chase Bank imposed a $59 annual fee and a variable interest rate of prime plus 9.99% (currently 13.24%.)

But there was a strange twist in the fine print (and all of these offers came with a voluminous amount of fine print).

Applicants who don’t have the income or credit history required to qualify for a Visa Signature card might be offered a Visa Platinum card instead — with no annual fee. (But you only get two rather than 16 bonus credits for signing up.)

The Gold Delta Sky Miles card from American Express wanted us to pay a $95 annual fee, although it would be waived for the first year, and a fixed interest rate of 13.24%.

Click here to compare these deals with the best credit card offers in our extensive database.

Ally Bank ratesHere’s how the FDIC is pressuring Ally Bank to lower its rates on CDs and savings accounts. It’s the latest example of how the government is punishing savers to save the banking industry. The post is on Bankaholic’s Personal Finance Blog, which you can reach by clicking on the “finance” tab on any page.

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Comments (2)
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2 Existing Comments
  1. Rayle Shonie said:
    on June 17th at 04:54 pm

    With the forthcoming rules changing how/when credit card companies can increase consumer’s interest rates, I agree that we will start to see more and more cards with annual fees. It will be interesting to see where this goes.

  2. Pait said:
    on May 4th at 02:55 pm

    I bow down humbly in the presence of such gerantess.