October 21, 2009
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News: Oh My Gosh!
Oh my gosh! Citibank is at it again. Before the dust could settle on massive complaints about Citibank's move to shut down thousands of gas affiliated credit cards, the company has notified some cardholders of a significant increase in their credit card interest rate. In some cases, the rate has nearly doubled. Citibank gave customers the opportunity to opt out of the interest rate increase; however, in doing so, the account would be shut down upon expiration of the card. In some cases, it could mean a year or two, but in others it would be almost immediately. For customers who have smaller credit card balance it could be sufficient time to pay the balance off prior to the increase; however, it could have a devastating effect on others carrying a large balance forward.
The fact of the matter is that Citibank has devised new trickery to convince credit cardholders that they are getting a deal. The "Consumerist" published a copy of the notice the bank sent to a limited number of customers. Basically, the letter stated that Citibank was raising the interest rate on their gold cards to 29.99 percent; however, if the account holder consistently pays on time, Citibank would be issuing a rebate on 10 percent interest on a rolling basis for each month the account is paid on time. Sound confusing? It is. Anyway you look at it, the credit card's interest rate is 29.99 percent and when prime rate increases, this rate will as well.
According to Citibank, the interest rate increase was necessary in order for the bank to remain competitive in providing credit in the tuff economic market. Citibank maintains that this is their way of rewarding card customers who pay their bills on time by helping to offset the increase in interest rate. Citibank, consumer banking arm of Citigroup, is one of the U.S.'s largest credit card companies. Citigroup is headquartered in New York City and is traded on the New York Stock Exchange (NYSE) under the symbol "C".