Credit card companies try low-activity fee

January 28, 2010 5:45:50 PM PST
Some credit card companies have found a new way to make more money from your account. This is especially true for people who rarely use their credit card.

With new consumer protections for credit card holders taking effect next month, banks are looking for new sources of revenue.

Here's the latest one. Banks are rolling out so called "inactivity fees."

"For example at Fifth Third Bank, they're saying they're going to charge you $19 if you don't use your card over a 12-month period. Citigroup on the other hand, says for their cards, they're going to charge you anywhere from $30 - $90 if you charge less than $2,400 over the course of a year," says Melody Hobson, president of Ariel Investments.

Those who want to avoid those fees may consider cancelling their "low use credit cards." But be forewarned, your credit score could take a hit if you do. Citibank says it began informing its cardholders of the change in August. It says the change will only affect a small amount of cardholders.