We just learned Citibank is informing their customers it will impose an $35 annual fee unless a minimum of $2400/yr is charge on their credit card accounts. This is, of course, part of the unintended consequences of the new credit card reform laws. We wrote previously wrote about another unintended consequence, the conversion of credit card fixed rates to variable rates.

Are other banks planning on following suit in the imposition of new annual fees? A survey of other major card issuers, according to the Wall Street Journal:

• Capital One says they are not planning on imposing new annual fees or increasing existing ones.
• American Express, which already has an annual fee, is not planning on raising its annual fee.
• A Bank of America Corp. spokeswoman said the company hadn’t added any annual fees to its cards since May, when the legislation was passed.
• “We have no plans to charge an annual fee on our cards,” said a spokesman at Discover Financial Services.
• Chase, a unit of JPMorgan Chase & Co., declined to comment on its future plans but said that most of its cards don’t have an annual fee.

So what can you if you’re hit with an new or increased annual fee on a credit card account?

1. Cancel your card. If you do this, you may be taking a hit on your credit score. However, if you’re not in the market to use your credit immediately, the dip in your credit score will eventually dissipate with time.
2. Ask the bank to waive the fee. This may or may not work, but it never hurts to ask, does it?
3. Transfer your balance to an existing card. Be careful here. You may get hit with a finance charge of 3-5% of the balance, which is way more than the annual fee. A little math on your part can help you make the decision. Another point of caution: there is nothing preventing the account to which you’ve transferred your balance from imposing an annual fee later.

Have you been notified about a new annual fee or the increase of an annual fee on your credit card account? Leave us a comment and tell us about it!

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