Following the lead of its UK-based
subsidiary Egg, which rolled out the Egg Money World MasterCard on
14 July, a card subject to the once commonplace annual fee
(see RBI 616), Citi has
intimated to a number of its US-based customers that it will impose
an annual card fee of up to $90. The fee can only be avoided if
customers charge $2,500 to the card in the next 12
months.
Other Citi customers have received
notification that a $30 annual fee will apply to their cards; in
all cases, cardholders are being given two months to opt out on
condition that they repay their existing card balance over the
remaining term of their credit card contract.
Go deeper with GlobalData
The issuance of fee-driven credit cards may be
a global trend as more banks look to recapture lost earnings on
their card portfolios. Earlier this year, India’s biggest lender,
State Bank of India (SBI), reintroduced an annual credit card fee,
arguing that the levy encouraged a better customer connect and
promoted need-based issuance.
According to Indian media reports, SBI has not
suffered so far any reduction in card applications since the fee
was reintroduced.
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