Tan Kin Lian's Blog: Renewal fee on credit cards

Friday, July 13, 2007

Renewal fee on credit cards

Many consumers have several credit cards. We enjoy the waiver of the annual fee on the credit card for the initial few years.

We may not be aware about the expiry of this waiver period. They will renew it automatically and charge an annual fee (which can be quite hefty).

What can we do?

I suggest that you should check the expiry date with the credit card company and put a reminder in your diary or PDA. Prior to the expiry date, you should decide if you wish to renew it. If not, you can tell the bank.

Alternatively, you can write a letter to tell the bank that you do not wish to continue the card on its expiry.

I hope that the authority should require the issuing bank to get specific approval from the customer for introducing an annual fee on the expiry of the initial period. We should encourage fair business practice.

6 comments:

Anonymous said...: So far, I have not needed to remember my credit cards' expiry dates. What I have done is this:

1) When I receive my monthly statement, it will show the annual fee.

2)I will then call the bank and tell them I do not wish to renew my card, and that I will pay for all amounts on the statement minus the annual fee.

3) On all occasions, the bank will willingly waive the annual fee and request that I keep my card.

Even if the bank is unwilling to waive the annual fee, I don't think you need to pay for it as the fee is payment upfront for the coming year, not for the year that has passed (I may be wrong, though).; July 13, 2007 9:57 AM
Thomas Phua's Blog said...: James, you are correct.

I did the same.

UOB refuse to waive, that was many years back, and I cut off the card as told, and UOB never get me to carry their cards for past 10 years.

OCBC, like you, I called, because Union card is free for 5 years, and they agree to waive my tied to Robinson's and this year, automatically waived without me having to call them.

Credit cards are offered free by many banks.

So many come with free gifts thrown in, but I did not want to take it up as I do not need so many.

Many young people went on roll over and this is very dangerous, as I know many was declared bankrupt because of such rollover, as it rolled too big.

I hope some of the youngsters, especially Mr Anonymous will not come in and talk his nonsense here.

Temptation of spending on credit is so strong that many did not realise it until the roll over is too large to settle and interest pile up.

- Thomas Phua; July 13, 2007 11:02 AM
Tan Kin Lian said...: It is better to be pro-active and contact the credit card prior to th expiry date.

Keep the expiry date in the diary or PDA.

The advantages are:

* you are not subject to the "kindness" of the bank in waiving the charges

* you may overlook the charge, and have to pay it (unaware).; July 13, 2007 8:54 PM
Anonymous said...: I've never paid a single cent for Credit Card membership over the last 12 years. Given how competitive the Credit Card industry is, all you need to do is to call the bank and request them to waive the fees politely. No need to threaten to cancel the card. This has never failed on me, even for cards that I hardly use.; July 13, 2007 11:31 PM
Khiat Han Hwee Adrian said...: I had an experience whereby I only want to apply for the Credit Card.
But when the mailers came. 1 discounts card, 2 cheque books, 1 credit line facilities came along with my credit card.

I did not bother until one year later they charged me $60 for the credit facility. When I did not bother again for a month, they charged me another $60 for late penalty and around $2 for interest.

I was furious and cancelled the credit line facility which I never applied in the first place.; July 14, 2007 12:07 AM
Anonymous said...: I always prefer to control my accounts myself and don't rely on anyone else.
From my experience I can say that making a note in a diary about expiry of your credit card is a good idea.; August 28, 2007 2:37 PM