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THURSDAY, NOVEMBER 26, 2009
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6

Citi Jacks Up Card Rates on Millions of Accounts

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(Newser) – As many Citigroup customers are already painfully aware, the lender has drastically increased rates on some 15 million credit card accounts, the Financial Times reports. Holders of Citi cards co-branded with retailers such as Sears saw their interest rates climb by as much as 24%—or 3 percentage points—between January and April if they failed to pay off their full balance each month.

“It’s hard to tell if rate hikes on existing balances being put in place now are the result of prior bad business decisions or getting in under the wire of the new law,” says the Democratic rep from New York who authored upcoming legislation that makes such practices illegal.

Many lenders have increased their rates over the past several months, but analysts say Citi's increases have been the most drastic.
Many lenders have increased their rates over the past several months, but analysts say Citi's increases have been the most drastic.   (AP Photo/Bill Sikes, file)
Citigroup CEO Vikram Pandit says borrowers should accept a new world of tighter credit as the financial institutions recover from months of bad loans, failed banks and foreclosed homes.
Citigroup CEO Vikram Pandit says borrowers should accept a new world of tighter credit as the financial institutions recover from months of bad loans, failed banks and foreclosed homes.   (AP Photo/Carlos Osorio)
Citigroup Inc. is increasing base salaries for many of its employees
Citigroup Inc. is increasing base salaries for many of its employees "reportedly by as much as 50% for some" as it restructures its compensation program.   (AP Photo/Mark Lennihan, file)
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6 comments
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ClearSight
Jul 1, 09 6:54 AM CDT
Joining the crowd Citi? Chase already went up on mine and I've got good credit...... Reply
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Derni
Jul 1, 09 8:42 AM CDT
Chase offered me a nice lock in rate for 2.2 until I paid off the amount due-the money already on the card was left at a higher rate-what they didn't tell you-that when you make a paymnet they have the option to use the payment toward the amount they choose-so they used it to pay off the lower rate amount and left the higher intereste rate money alone-they also raised the % from 2.2% and 4.4 % to 17%-so I'll pay it off and be doine with Chase-I also have a nice amount of cash in their banks-that will be leaving their bank ASAP -I like payback-the laws should've required a freeze on raisding all rates the day the law was passed-anyone with common sense knew they'ed raise the rate before the law kicked in-dumb --goodbye chase Reply
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zygote
Jul 1, 09 9:26 AM CDT
If we all just stop using credit cards. I wonder what would happen? Reply
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IN RESPONSE:
shonangreg
Jul 1, 09 10:07 AM CDT
Bye bye Miss American Pie . . .
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beatmastermcfly
Jul 1, 09 10:16 AM CDT
wait wtf was the point of the credit card legislation obama passed in may then... Reply
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+1

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