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January 15, 2022

New credit card fees on the horizon: report

A move by the United States Senate ,400%20per%20year.%20Fees%20for%20printed%20statements.%20Some%20issuers%20are%20adding%20a%20href="%20monthly%20processing%20fee%20should%20you%20request%20a%20printed%20credit%20card%20statement%20each%20month.%20%20Decreasing%20rewards%20on%20many%20cards.%20Issuers%20will%20cut%20costs%20by%20reducing%20rewards%20for%20some%20cardholders,%20especially%20those%20who%20don%E2%80%99t%20an%20annual%20fee%20and%20pay%20off%20their%20balance%20each%20month,%20Hardekopf%20says.%20%20The%20reduced%20rewards%20could%20come%20in%20several%20different%20forms,%20including%20a%20cutback%20in%20the%20payouts%20of%20cash%20back%20cards;%20higher%20tiers%20to%20receive%20the%20same%20level%20of%20rewards;%20or%20more%20miles%20or%20points%20needed%20for%20that%20currently%20existing%20perks./">to rein in credit card rate increases and excessive fees has U.S. card issuers scrambling to replace all that lost revenue. 

As a result, the cost of credit cards will likely increase despite the major provisions of the CARD Act scheduled to go into effect on February 22, says Bill Hardekopf, author of The Credit Card Guidebook.

Even cardholders who pay their balance in full every month may see the end of 'free' credit card loans as we know them, he predicts.

His other predictions for the North American credit card industry include:

More cards with annual fees. Both Bank of America and Chase have already made the first moves to test annual fees on a small percentage of cardholders or offer cards with annual fees that build customer loyalty.

Fixed rate cards switching to variable rates. Last year, issuers switched many fixed rate cards to variable rates, making rate increases for everyone almost inevitable as the economy recovers and interest rates in general rise.

New inactivity fees. Fifth Third Bancorp recently added a $19 inactivity fee for cards that stay unused for a twelve month period. Citi, as well, informed some cardholders that they will be charged an annual fee of $30 to $90 unless they spend at least $2,400 per year.

Fees for printed statements. Some issuers are adding a $1 monthly processing fee should you request a printed credit card statement each month.

Decreasing rewards. Issuers will cut costs by reducing rewards for some cardholders, especially those who don’t face an annual fee and pay off their balance each month, Hardekopf says.

The reduced rewards could come in several different forms, including a cutback in the payouts of cash back cards; higher tiers to receive the same level of rewards; or more miles or points needed for to obtain currently existing perks.

Have you received any bad news like this from your credit card company?

By Gordon Powers, MSN Money



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Gordon PowersGordon Powers

A long-time fund company executive, Gordon Powers now heads up the Affinity Group, a financial services consulting firm. Gordon was a personal finance columnist for the Globe & Mail for many years, has taught retirement planning...

James HaversJames Havers

James is the senior editor of MSN Money living in Toronto. He has worked for the Nikkei Shimbun (Tokyo),,, Canadian Business and other publications. Havers turned to journalism after teaching overseas.

Jason BucklandJason Buckland

The modern-day MC Hammer of money, Jason can often be seen spending cash that isn’t his with the efficiency of a Wilt Chamberlain first date. After cutting his teeth as a reporter for the Toronto Sun, he joined the MSN Money team with...