July 17th, 2008 by Kenneth Long
Many credit card companies still include many transaction fees into the minimum payment calculation. This means a balance transfer could cause your minimum payment to skyrocket for 1 month, thereby jeopardizing your ability to remain current. Now Citi is making a change.
Citibank has quietly made the change which will apply to new balances over $20. It is unclear whether this change applies to all cardholders or to a select group of customers.
This is the change according to Citibank:
Your Minimum Amount Due on any New Balance over $20 will no longer include the total amount of your transaction fees. These fees include balance transfer, cash advance, and other foreign purchase fees. Remember, you can pay these fees (and any other amounts owed on your account) at any time.
This is a boost to cardholders that may be using their cards for a major transaction that incurs fees. Some of these transaction fees can add up to a one-time charge of hundreds of dollars, depending on the size of the transaction.
Adding these fees to the minimum required payment for the following month can make it hard for cash-strapped cardholders to afford. Even if they are saving money on an attractive balance transfer offer, failing to pay the full minimum payment for one month can negate the rate offer and may cause a rate hike that affects all balances on the card.
Not all credit card issuers have followed Citi’s example. Additionally, it is still not clear if this change applies to all Citibank cardholders, since no public announcement has been issued by Citibank.
Citibank, Other Card Issuers Raising Rates [November 14, 2008]
This entry was posted on Thursday, July 17th, 2008 at 2:22 pm and is filed under Credit Cards. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.