Last week, Citigroup dropped two of the most criticized features of its credit cards: universal default and anytime interest rate changes. As Professor Elizabeth Warren notes, millions of customers will now get a better deal.
Universal default, a common practice among credit card issuers, is when the company increases a consumers’ interest rate when that consumer is late paying other creditors’ bills. The “anytime for any reason” rate increases, lets the company to raise interest rates and change terms at any time and for any reason.
The Citigroup shift is a reminder that the card companies can be forced to change their policies. Recent hearings in the U.S. Senate directed tough questions to the credit card issuers. The senators made it clear that they believed they had found an economic issue that matters to a lot of families.
And how can this change make a difference in your life? If you have a Citibank credit card, pick up the phone and call them today. Tell them that you know they dropped their universal default charges, and you want them to lower your rate back to what it was before they jacked it up. Citigroup has indicated that the policy change will go into effect for current customers in April, but you may be able to get them to make the change for you a little earlier.
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