Many are asking why Citi raised their APR – often for no reason – to a higher interest rate. Well, you are not alone. They have raised rates on up to 15,000,000 US accounts. After the Financial Times broke this story, Citi responded claiming they are the rate hikes were part of their “regular account reviews.” Well, I suppose that makes sense if you consider it’s “regular” to raise an APR by nearly 24%, which is the average increase seen on their co-branded cards (such as the Sears card) from the first of the year through April, for customers who carried a balance.
It is true that credit card defaults are occurring at a record rate right now, but it appears Citi is being more aggressive than its competitors in raising rates. The other important point they should remember is that we, the American taxpayers, bailed them out big time. In fact, we took on over $300,000,000,000 in liability to keep their company afloat… and this is how we are repaid?[We reported in May about B of A is doing pulling similar shenanigans. Check out the letter they sent out as their crazy justification for Bank of America cutting credit limits.]
Written July 2009