It arrived in Rich Stevens' mailbox a few weeks ago: the notice that Citibank had "rate-jacked" the Visa cards belonging to him and his wife.
In the blogosphere, writers are livid at the instant rate hikes -- called "rate-jacking."
Citigroup seems to be the target of most bloggers' venom -- partly because Citigroup issues so many credit cards and partly because Citi began sending the notices at about the same time it was getting a $20 billion, taxpayer-financed government bailout.
No one at Citigroup would talk on camera to CNN about the matter. Instead, the company issued a written statement, which said: "To continue funding in this difficult credit and funding environment, Citi is repricing a group of customers."
Citi told CNN that anyone unhappy with the new rates can opt out and continue paying the lower interest, but they must close their account when their card expires. It's all in the fine print.
Rep. Carolyn Maloney, D-New York, said she is sick of the fine print.
She agreed that credit card companies get away with whatever they want, as long at they put their desires into the fine print.
"They have this provision that says they can raise the rate -- any time, any reason," she said.
In September, Maloney got the House to pass by an overwhelming margin of 200 votes the "credit card holders' bill of rights," which would have stopped rate-jacking and the imposition of other fees by banks.
The chairman of the Senate Banking Committee is Christopher Dodd. His staff said the Connecticut Democrat has his own credit card bill containing tough language to stop things like rate-jacking and shortening of billing cycles -- two issues that anger consumers.
But even Dodd's own bill has failed to gain traction -- it has sat since July.
On Thursday, the Federal Reserve is expected to vote on its own new rules regarding credit cards, rules in the works for four years that could clamp down on rate-jacking.
I guess what I don't understand is why they are stating that it is targeting a specific group of customers. It appears that all their customers are getting hit with the increase. I have an excellent credit rating always pay double the amount required and are no where near my limit and I am getting hit with an increase. Its bad enough I lost money on their stock now they want it tot take more
ReplyDeleteI've been with Chase for about 9 years and never had this problem. I hear alot of people talk about there credit card rates getting jacked-up. But most of the people I know had bad credit to start with. I do think it's wrong to just jack-up someone rates just to bring in extra money. If it happened to me without a valid reason, I would just go to another credit card company.
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ReplyDeleteI have a credit rating of 800, no debt aside from a mortgage and I am also getting hit with this rate increase. Maybe it is because I pay my bill off every month. Citi hates customers like me because they don't make any real money.
ReplyDeleteI plan on calling them and demanding a rate cut. If they do not cut it, I will be taking my business elsewhere.
That would be a smart move on your part Christine. Don't let someone take advantage of your perfect credit rating by "rate-jacking". Make sure you stick to what you believe in. If they don't lower your rate, take your business where it would be more appreciated.
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