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Citi Rate Change Clarification

Written by admin - 17 Comments

According to a comment from a reader named ‘Karmazoic‘, the Citi credit card rate change only affects new purchases, and not your current balance. As such, it sounds like promo rates on existing balances should be safe. If you have any questions, be sure to call them and get an answer straight from the horse’s mouth.

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Comments (scroll down to add your own):

  1. promo rates are safe, unless you default on any of the terms of the promo. all the more reason to ensure you actively monitor payments.

    Comment by Tim — Dec 2nd 2008 @ 7:15 pm
  2. I don’t think this is true. I called Citibank and they said it affected my current balance, not just new purchases.

    Comment by Kim — Dec 2nd 2008 @ 9:44 pm
  3. They told me the new rate affected my entire balance (and new purchases) with the exception of promo rates. For me, that was a balance transfer that makes up about 5% of my entire balance. The rest is subject to the new rate. I opted out, my card will now be in effect until the expiration date on the card at my current rate, after that it will be closed. And I will be able to pay in payments, the entire balance will NOT be due at that time. Sort of sucks, because I’ve had that card forever, but I have other cards, with way better rates, and I’m slowly paying them all off, but I don’t want my current balance to be at the new high rate.

    Comment by Erika — Dec 2nd 2008 @ 11:37 pm
  4. there are all kinds of different rates going on these days. the best thing to do is read the fine print on your specific notice(s), like you should have been doing. if you are going to ask for verification of anything, send secure email through your account so you have documentation. that is much better than a csr who verbally told you something by mistake.

    Comment by Tim — Dec 3rd 2008 @ 5:11 pm
  5. I called Citi today and none of the life-of-balance promo rates (2.9% and the like) are affected, only the purchase, default, and cash advance APRs.

    However, the higher APR DOES apply to any existing balance under the standard purchase APR, not just new purchases. Of course, this doesn’t get paid off until I pay off all the lower rate balances, so I will now be paying 18.99% on a $15.00 balance (a single purchase from years ago), but keeping 2.9 and 3.9% rates on the debt I’m paying off.

    Knowing this, I won’t be opting out, as I never use the Citi card for purchases anyway… it’s just a big balance transfer I’m trying to pay down. My main fear is that the other credit card companies will jump on the bandwagon and raise all their APRs too…

    Comment by Mooseboy — Dec 4th 2008 @ 5:23 pm
  6. @mooseboy: you can guarantee everyone will be doing the same. so better get use to the idea and adjust accordingly.

    Comment by Tim — Dec 4th 2008 @ 7:20 pm
  7. You guys have it all wrong and I do apologize that someone told you. I am a manager at Citi and the new purchase APR does not apply to your current balance, only going forward.

    Comment by Nicole — Dec 6th 2008 @ 10:19 am
  8. I called Citi a few minutes ago and a supervisor said the new APR does apply to the current balance.

    Comment by Dee — Dec 7th 2008 @ 10:36 pm
  9. again, i think people need to read the notice for each individual case. there are several different situations with several different rules. i would also recommend using the secure email feature in your online account so you have documentation of any rule clarifications. much better to have something in writing than an over the phone type thing.

    Comment by Tim — Dec 8th 2008 @ 5:50 am
  10. I called and was told the same thing as most of these people. It applies to all purchase balances and new purchases going forward, not on special rate promotions (like transfers), but I expect if they are transfer rates that will expire, the new APR will take over. I have to opt out myself as well, though it will really hurt my score. I have never been a DAY late or over limit and they have always raised my available credit because of my good history. Citibank won’t get my business going forward

    Comment by Sandra — Dec 20th 2008 @ 11:54 am
  11. Not true. It affected my entire balance. This is the last straw for Citi for me. I’ve been a customer for 10 years and pay my bill on time every month (automatic payments + additional ones on top of that), but recent circumstances meant carrying a balance. My rate was fairly low (11%) so this is extremely upsetting. I’ve already bailed them out once. I’m not going to do it again. I opted out this morning. When it’s paid off I’ll be taking my business to my local credit union that has the rest of my accounts and treats me right. I’d prefer not to have a credit card at all, but that’s not really an option these days.

    Comment by Bryan — Jan 16th 2009 @ 1:54 pm
  12. I work for Citicards customer service and the change in terms that is going out to the majority of the cardholders will relate to your entire existing & new purchase balance. The only thing it will not affect is any promotional balance transfers that you may have. Some rates are going from as low as 5.99% to 29.99%. Please I urge everyone to read the notices they get and make the appropriate decisions.

    Comment by Citi Employee — Feb 21st 2009 @ 5:17 pm
  13. I have too been a customer with Citi for a very long time. I had what I thought was a good rate and had been generally happy with the customer service. The rate change is for the enitre balance! The way I see it, they are taking government money (our money) and then turning around and hosing us the customer and tax payer. I decided that I would take my money local as well. Fortunately, I wasn’t in that deep, but I feel for the people who are and have been put in a worse situation because of Citi’s behavoir.

    Personally, I don’t think the government should help Citi. If thery are destine to fall, let them fall. Isn’t that how a free market is supposed to work?

    Comment by John — Feb 27th 2009 @ 12:58 pm
  14. This is just their way to get a certain % of their credit lines, or so called “customers”, to cancel out their accounts by opting out.

    I’ve been a card holder for 10 years as well and I think this is horrible. I’ve never been late on a payment. Not once. I’ll admit I do have a large balance, but already pay citibank $200+ just in interest a month. With this rate increase, my minimum payments will jump to over $700/month. Seriously, who do they think could afford this?

    Yes, I take responsibility for my actions – but what it boils down to is that this is a pretty shady way to get rid of customers…how about lowering interest rates for on time paying customers as an incentive. Or if you charge under $XXX in a 6 month period, we’ll lower your interest for a certain time frame.

    There is my rant, time to send off my “opt out” letter. In the long run, why would I want to be a customer of a financial institution that treats its customers this way.

    Comment by Tim — Jul 24th 2009 @ 9:36 pm
  15. This is insane .. I have had an agreement for years as a “FIXED” Rate Credit Card.. I have “declined” all the LOW Variable APR Teasers that CITIBANK has sent to me for all the years I paid the slightly “HIGHER Rates” of the FIXED RATE CARD, just to “keep” the “FIXED RATE” when the economy changed… IT CHANGED.
    And now that they could NOT get me to BITE (and obviously others) Citibank (who is still doing normal business) is going to OPTION out of our agreement ? Sounds like a CLASS ACTION LAW SUITE for a good Lawyer.

    If CiTIIBANK can get away with this … will Banks be able to option out of FIX RATE MORTGAGES ?? Please no big discussion on that, it will “only be used” as to side track this issue…. I am just saying “what next”.

    The way I see it … CITIBANK can repay me ( with interest) for all the Extra APR money I paid on my HIGHER FIXED RATE billings through the years, to be able to now option out now from “our” agreement of a FIXED RATE CARD.
    Otherwise .. to have “KNOWN” that CITIBANK “COULD & WOULD FORCE the VARIBLE RATE ANYWAY” I would have taken the VARIABLE RATE years ago.. and I WOULD HAVE SAVED MONEY on all those TEASER RATED years THAT I DECLINED to go with the VARIABLE rate card…
    All of which I didn’t want because I had a FIXED RATE CARD .. And Yes I have only had a FIXED RATE MORTGAGE IN MY LIFE …
    People … Money is being lended to BANKS at the CHEAPEST RATES IN HISTORY .. yet CITIBANK has taken this course of action? Maybe if the government didnt’ bail out CItibank and Citibank had to fold, then I would understand a new agreement ( like GM did to its contracts) … but not this way.
    I believe we need to be heard and all post to a site, to have LEGAL representation / assistance.
    Is there any good legal consel out there who is willing to take this on ??? I know Citibank is reading this column from line one comment on this tread.

    Comment by Larry — Aug 16th 2009 @ 2:04 pm
  16. I also politly told Citi to “stuff” their offer after many years as a loyal customer and as others have posted will never deal with them again. This is an issue that must be brought to each and every affected individuals Congress person. This is how they show their thanks for OUR bail out.
    Outrageous and count me in for any class action!

    Comment by Pat — Aug 24th 2009 @ 6:33 pm
  17. Count me in on the class action as well. I also have been a customer since 2001.

    Obviously Citibank is trying to intentionally get rid of customers. I don’t know if you all realized that the notification letter was tailored to the individual. For example, we didn’t have an option to use the card until the expiration date. We were told that if we opt out we could no longer use the credit card immediately.
    I told them that they were loan sharks, unethical and underhanded. They tried their best to increase rates before the credit card bill was passed. Guess what, it’s their loss. Raise your children not to use Citibank and encourage your friends to drop Citibank immediately.
    We will see how much money they make on people that pay their balance off every month. Also the next time they ask for a bail out let them fail…..

    Comment by Smith — Nov 7th 2009 @ 1:20 pm

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