Since April, credit card issuers have been facing many delinquencies due to the downturn in the economy. This has not stopped them from finding creative ways to attempt to cut these losses, such as implementing inactivity and other fees.  In June, Fifth Third Bancorp added a $19 inactivity fee in order to offset increased servicing costs. Inactivity fees have been used before but have often been waived when the consumer uses the card periodically.


As of November 18 consumer debt was at $ 842.6 billion, which was 1.7 percent lower than last year’s level. This is a result of many individuals paying down their debt and not using their cards. According to Nick Bourke, manager of the safe credit-card project at the Pew Charitable Trusts in Washington, many consumers do not want to cancel their cards because it can hurt their credit score. If they cancel their card, they will have a higher utilization rate which results in a lower score.

Testing Fees

Some of the bigger card issuers are experimenting with fees for customers who they feel aren’t using their cards enough.  For example, Citigroup charges customers different rates based on how often they use their cards. This was according to letters the company sent out in November to cardholders.

Also, Bank of America has started some tests, charging consumers fees from $29 to $99. These charges were applied to less than one-half of one percent of all of Bank of America’s cards. However, they have not made a full decision on whether they will apply these charges to a wider range of customers.


In a Moody’s Investors Service report on November 20, it was stated that delinquencies on loans at least 30 days overdue rose to 6.12 percent in October from 5.97 percent in September. This is viewed as a sign of future defaults and is the highest level since April.

Since President Barack Obama signed the Credit Card Accountability, Responsibility and Disclosure Act May 22. Consumers have been resistant to inactivity fees over the years but with fewer ways for banks to make profit on credit cards, they may soon be forced to create many new ways to charge customers.

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Simon Zhen

Simon is a research analyst for MyBankTracker. He is an expert on consumer banking products, bank innovations and financial technology.
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  • ProcessUSA

    The problem with the signing of the act is that it's not going to make things any better for the consumer, quite the opposite. It's going to create ways for the credit card companies to start taking advantage of consumers in order for them not to get hurt.

  • Karl

    When I receive my first “inactivity fee” on my BOA credit card I will close my last credit card. I am trying to get my “debt score” down to zero. More and more people are realizing they don't need a single credit card. Join the club and say no to debt.


    This is pretty ridiculous, people try to cut down on their debt by not using their credit cards, but now they charge you an “inactivity fee?” Just another way the banks try to gouge consumer's money.


    This is pretty ridiculous, people try to cut down on their debt by not using their credit cards, but now they charge you an “inactivity fee?” Just another way the banks try to gouge consumer's money.

  • teletrack payday loans

    Well its the best time to make some money for the credit card companies…They for sure will utilize the time…

  • no teletrack payday loans

    The credit card companies will surely make use of the chance…

  • 4 Channel Amplifier

    Unbelievable!!! I am stuck with paying the bills. Another fees !!! that sucks.

  • card processing

    It’s certain that banks will do anything to offset their losses due to Obama’s new regulations. Hopefully this won’t make them much more aggressive than they already are. Do you think many people are switching to credit unions now?