Credit Cards Requiring Minimum Annual Purchases

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The recently enacted credit card laws are having some unintended consequences. Just as many places reported, credit card companies are now turning to other “innovative” ways to drum up revenue – one of those silly unintended consequences. It turns out, some are now requiring that you make a minimum amount in purchases a year to avoid an annual fee. Sam recently received a letter from Citi about this:

My husband recently received a notice form his Citi Master Card that they will now begin charging him $35 per year as an annual membership fees. The membership fees will be waived if at the end of the year we make more than $2400 in purchases. We know for a fact that we will not meet that $2400 amount. We are thinking about canceling his credit card but then we thought that would probably hurt his credit score. What should we do?

The first strategy I would try is to ask if the fee could be waived – unfortunately, she tried that and Citi said “No.”

The next strategy I would try is to consolidate that card into another Citi card without a $2400 requirement. Sam didn’t have another card so this option was out of the question.

If neither of those two easy techniques work, you could use a trick I revealed for busting cashback tiers on credit cards – buying Presidential $1 coins. At the moment, there are five (six technically because one set is supposed to be released August 11th, but the Mint website doesn’t reflect that) sets of 250 coins available and you can buy 2 each with free shipping. That gives you $2500 in actual money can you deposit in your bank.

If you don’t want the hassle, you can always just cancel the card. It will hurt your score but unless you plan on buying a house or car in the next year, I’d rather dump the card, take the credit score hit, and not pay $35 a year for nothing.

{ 37 comments, please add your thoughts now! }

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37 Responses to “Credit Cards Requiring Minimum Annual Purchases”

  1. mildred hasser says:

    Could I get a list of all credit cards that charge a fee for not charging enough or often enough?

  2. cheryl says:

    I called Citi and they told me they were charging me the $60 annual fee because I don’t use the card enough and they want me to use it more. The card I have originally was a no annual fee card. I asked if they could issue me another card with the same account number and they said “no”. I have to close the existing account and open a new one. And get this. I was told that the card would not have annual fee for one year and then I would get charged a fee. So, what is the point of staying with Citi? I am going to get a new card and then cancel my account with Citi. I, too, like many others pay my bill monthly. Perhaps American Express is the way to go.

  3. Connie Kim says:

    I had the same exact situation as Cheryl. I was charged $60 this month because I don’t use this card enough and they said they “lose” money for keeping this card. I have had this card for past 6 years without the annual fee and I find it totally ridiculous.

    I don’t understand why my credit score will go down if I cancel one of my credit cards (I had two, one being Citi the other which I am keeping is AMEX) while I owed nothing (zero balance). Can someone explain?

    • Andrew says:

      When you close a card, your total credit utilization (total balance/total credit line) increases because the denominator decreases. Thus your credit score decreases, though generally not much.

  4. Anonymous says:

    Citibank is digging their own grave!

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