No-Fee Credit Cards Make Comeback

By Kathy Chu, USA TODAY

No-fee credit cards are enjoying a renaissance. Over the past few weeks, American Express and Citibank have issued no-annual-fee, no-late-fee credit cards with interest rates that vary depending on the customer’s credit history. Commerce Bank introduced a card earlier this year with no fees and the same floating rate for all its bank customers.

“Customers really dislike late fees,” says Antony Jenkins, an executive vice president at Citibank. “Everyone’s really busy, leading complicated lives. They want to be treated fairly.”

The moves come as fees, along with consumer complaints to bank regulatory agencies, are increasing. For 2005, penalty fees ? such as late and over-the-limit charges ? are expected to rise 11%, to a record $16.5 billion, and bring total fee income to $54.9 billion, says bank advisory firm R.K. Hammer.

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