• July 8, 2010

Credit card issuers who are considering imposing annual fees can expect customer backlash, according to Cardbeat, a syndicated market research report published by Auriemma Consulting Group (ACG).

New regulations, coming at a time of high losses, are driving many credit card companies to consider ways to increase revenues. When it comes to applying for a new credit card, Cardbeat research indicated that consumers look first at annual fees, with APR considered second, and rewards programs being a distant third.

In a recent Cardbeat survey of 428 cardholders conducted in May 2010, nearly half of respondents said they had paid some type of fee on their credit card within the past 12 months, although only 25% paid an annual fee. Activity and penalty fees -- for cash advances, late payment, and going over limit -- provoke less ire among consumers.

For consumers, avoiding annual fees may become more difficult. Although only about 20% of U.S. credit cards currently have an annual fee, this percentage will likely rise.-Tanya Irwin