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The Inactivity Fee Returns

2010 already looks like it's shaping up to be the year of ever-expanding fees for credit cardholders. While legislators are still celebrating and patting themselves on the back for passing the CARD Act of 2009, consumers, on the other hand, haven't experienced much to be happy about at all. Credit limits continue to get slashed, interest rates are on rise, and credit issuers are resurrecting old fees or adding new ones in an effort to recapture lost profits.

The inactivity fee is just one of the newly resurrected charges that appears to be gaining more and more traction among credit issuers. Fail to use your card often enough this year, and you may find yourself getting whacked with a monthly fee for lack of use. And to make things worse, the fee could even be triggered after you've opted out of a change in terms and are essentially forced into inactivity. Of course, nothing in the CARD Act exclusively prohibits these actions. According to a recent report released by the Center for Responsible Lending, consumers could pay as much as $36 in yearly inactivity fees. However, I've heard reports of banks testing much higher rates on certain percentages of their client base. Fortunately, I haven't seen one added to any of my credit card accounts yet. How about you? If you've been charged an inactivity fee or have seen one added to your credit card's terms, let us know how much and from what credit issuer in the comments sections below. The return of inactivity fees is just another reason why it's a smart idea to use each of your credit cards at least once a month to pay a recurring bill or simply make a small purchase. You'll not only avoid having to deal with complete account closures, but you'll also avoid getting surprised by one of these nasty inactivity fees.

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Joshua Heckathorn's picture

Joshua Heckathorn was President of Creditnet, is a credit expert and has been featured on CNNMoney, FOX Business, Yahoo Finance, The Street, and many other national publications during the past ten years.  He received a Bachelor of Science in Management (Finance) from Brigham Young University's Marriott School of Business and earned his MBA from Seattle University.

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