Today we received a letter from Citibank notifying us that they are going to introduce an annual fee of $60 for our Citi Cash Returns Card effective from April 1, 2010. This was a nice card which offered a no hassle 1% cash back on ALL purchases. The best part was that we'd get our cash back check automatically once it crossed $50. No headaches of ordering a rewards check or expiring rewards. With this new annual fee this card simply isn't an option for us. Why did Citibank do this? In their own words:
The reason we are making this change is to maintain the quality of our service amid the rising cost of doing business.
Is there a way to avoid this annual fee?
Well, Citibank says that they have worked out a solution for their "valued" customers.
However because you are a valued customer, we wanted to give you an opportunity to have the annual fee credited back to your account. Here's how it works. Each year, we'll credit the $60 fee back to your account once you have made $2,400 in purchases during that year. That comes to an average of $200 in spending a month, an amount you can reach by using your card for purchases you already make, like gas, groceries, cell phone plans or your cable bill.
Else what?
We have the right to opt out of this change (of annual fee of $60) and close our account. We can opt out by calling or writing to Citibank by March 31, 2010.
Now what do we do?
We've decided to opt out. Discover More offers 5% cash back on select categories along with an option to double the cash back with their partner merchants. So we'll make Discover More our primary card now. The best part is that they are offering a $50 sign up bonus for new accounts. So if you want some free money along with a good credit card, check out Discover More.
As the credit market tightens due to new regulations, we feel more banks might follow Citibank's act of adding annual fees to erstwhile free cards. More so for "deadbeat" customers like us who pay off their balance every month.
Let us know what you feel about this new change from Citibank. We look forward towards your comments.
Image Source(s): iStockPhoto
