Citibank Raising Interest Rates for Some Cardholders
December 2nd, 2008 by Kenneth Long
Citibank has begun sending notices to Citi cardholders that have not experienced a rate increase within the past 2 years. This rate increase has been anywhere from 2-4 percentage points.
Increase in Interest Rate for Purchases
Interest rates on Citi card accounts are going up for those cardholders that experienced no rate increases within the past 2 years. This is an across the board increase that is expected to impact 20% of Citibank credit card accounts.
The purchases rate will increase for these accounts. Balance transfer offers would not be affected according to the terms released by Citibank.
Increase in Default Rate
Default rates are also expected to increase for many of these cardholders. This penalty will not impact cardholders as long as they avoid any of the common triggers for default rate pricing. These usually include missed or late payments and exceeding the credit limit on any card account. Of course, if universal default clauses return to the market, then there may be nothing you can do to prevent default rate pricing unless you are able to quickly repay your debt balances.
Avoiding Increases
I too received a notice that my normal interest rate would increase. I indeed am one of the cardholders that has not experienced a rate increase in more than 2 years, which would also subject my account to the announced changes.
I called Citibank and requested clarification on the increase. The changes were explained to me, and the representative declined to reverse the change on my account. It set a minimum APR of 18.99% for purchases, of which other cardholders may see a somewhat different rate.
If the increase in interest rates will affect your ability to repay the debt (rate increases cause payments to increase), then you should consider options to prevent a rate increase. This could include opting out of the changes, which would cause you to lose purchasing privileges on the account once the card expires. To opt out, call Citibank at 866-565-7030, or you may write to Citibank:
Customer Service Center PO Box 6218 Sioux Falls, SD 57117-6218Cardholders that are already experiencing repayment difficulty on multiple accounts may need more substantial action. If this is one of several accounts that you have, and you are having trouble keeping up with minimum payments, it may be time that you speak with an Accredited Financial Counselor. Getting lower interest rates on your cards is key to receiving a lower payment.
This entry was posted on Tuesday, December 2nd, 2008 at 5:48 am and is filed under Credit Cards: Citibank, Financial News. 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.
April 5th, 2009 at 10:41 am
I was offered an attractive non-expiring 2.99% balance transfer 2 years ago which I happily accepted, the closing dates of choice was after the 15th which they agreed on, but hell broke loose when they start changing the billing closing dates.
I work for a bank and traveled often at the time and I was unable to take a look at the card statements in a timely fashion which made me failed one payment. I contacted them and they gave me million excuses NOT to honor the original 2.99% offered. I was ok, with the 8.99% charged at the time, but a year later, and billions of dollars received in Bail Out money… OUR MONEY… they bumped the rate to 19.99%.
I asked them to closed the account and they told me that if I did so, I needed to pay off the full balance within 3 months… talking about predatory practices indeed. My reply to them was, “go ahead, you guys just don’t want to be paid. You are converting a good standing account into a bad debt for your benefit”.
My guess is that they are forcing another financial crisis by squeezing tax payers to levels seen never before just to get more money from the Feds.
Unfortunately even the bank I work for is incurring in the same predatory practices… the bank received Bail out money as well.
And the government? Doing well, thanks. Who cares how much Europeans love Obama, if Obama is not showing love to tax payers…
October 25th, 2009 at 6:14 pm
I just want all of Citibank customers to “remember” these pirates when the economy changes. I know I will.
They changed my interest rate from 9.99 to prime + 26.99…good God!!!
I opted out and will repay the charges at my original rate, but after being a faithful customer and a good one at that, will NEVER do business with these bums again.
November 19th, 2009 at 12:12 pm
I have been a Citi Bank cardholder for many years and have paid each month on time. Never a a late payment. They have always given me a fairly decent rate until Nov. 17, 2009, I received a letter stating my rate will increase to 19.19%. That almost tripled my current rate. I called and was very nice but they would not lower the rate even a little. I will NEVER EVER do business with Citi again.