Citi Bank is raising interest rates it charges to its best cardholders - regardless if they have a perfect payment history, excellent credit score, and have never been late with any creditors.
This month, Citibank inserted a "Notice of Change in Terms and Right to Opt Out" in cardholders' monthly statements.
The notice reads:
"We are increasing your variable APR for purchases. Your purchase APR will equal the U.S. Prime Rate plus 7.99%, with a minimum APR of 13.99%..."
According to a Citi Card supervisor, the move is "widespread" and has nothing to do with your credit history. In her words, "It is a banking decision." The representative expressed embarrassment and said "I don't know why they are doing this".
The notice does allow cardholders to "opt out" of the increased rates - but the account will be closed when the card expires. Though I won't close the account for fear of harming my credit rating, I will never again use it my Citi Bank credit card.
In the past, I have lamented about the predatory credit card industry - with terms equivalent to loan sharking.
And I expressed my real sorrow for those who fall on hard times and are at the mercy of the credit card industry.
Some commenters to this blog blamed the card holders, writing:
"As to credit card issuers being out of control... They aren't. They are operating within the law, and it is rather credit users who exhibit a lack of control."
Fortunately, there are regulations and new laws being created that will finally reign in some of this abuse (the bills could go much further, but the credit card industry has lobbied and bought off more than a few politicians).
With looming regulation coming, Citi Bank is making one last ditch effort to screw as many people as possible before time is up.
Shame on you Citi Bank.