The CARD Act - Cut the card, or cut back?

New credit card act details
New credit card act details

Last week, Citibank began issuing letters informing some cardholders that as of April 1, 2010, a $60 annual fee will be applied to accounts. The company didn't return my call for comment, but it has widely been reported that accounts were selected based on customer history and payment performance, not type of credit card. In other words, if you're not a profitable customer – you don't use your card very often – they're trying to turn you into one.

Consider this strike one. For months, we've been speculating that as a result of the CARD Act which, effective today, issues new credit card rules that restrict card companies from raising interest rates on pre-existing balances, issuers will start bringing back the annual fee. There's little doubt in my mind that other issuers will pile on (much like American Airlines has followed Jet Blue into the business of charging for pillows and blankets). Bill Hardekopf, founder of LowCards.com, agrees.