Citi Raises Rates on Cardholders
- July 02
- D&S BLOG
This is before new regulations come into effect that prevent them from doing this very thing come into effect in a few months. From The Financial Times:
Citi raises card rates on millions
By Francesco Guerrera
Saskia Scholtes
Tom Braithwaite
Financial Times
Published: June 30 2009 23:59 | Last updated: June 30 2009 23:59
Citigroup has sharply increased interest rates on up to 15m US credit card accounts just months before curbs on such rises come into effect, in a move that could fuel political anger at the treatment of consumers by bailed-out banks.
People close to the situation said that Citi, which is about to cede a 34 per cent stake to the US government as part of its latest rescue, had upped rates on between 13m and 15m credit cards it co-brands with retailers such as Sears.
Citi’s rate increases emerged on the day the government proposed legislation to create a new regulator with sweeping powers on consumer protection and a week after the bank was attacked by some politicians for raising employees’ salaries.
Holders of co-branded cards who failed to pay their balance in full at the end of the month saw their rates rise by an average 24 per cent–or nearly 3 percentage points–between January and April, according to a Credit Suisse analysis of data from the consultancy Lightspeed Research.
