20% Of Citigroup Cardholders Can Expect Rate Increases For 2009

If you have a Citigroup-issued credit card and you haven’t had a rate increase over the last two years, expect to be notified of a 2-3% rate increase on your November statement. Congratulations! You’re going to help Citigroup offset its losses in the global credit card division, whether you were directly part of those losses or not. As the New York Times points out, by doing this Citigroup is breaking the promise they made to Congress in 2007 that they would not arbitrarily raise rates on accounts—which may be why they’re offering a fairly lenient opt-out policy.

From the New York Times:

Citigroup cardholders will then have until the end of January to turn down the higher interest rates. If they decline the rate increase, they will pay down the balances on their accounts under the old pricing terms and will be able to continue to make charges until their credit cards expire.

After that, however, customers will have to reapply for a card or find a different lender.

If you receive your statement online, a separate rate increase letter will be mailed to you. LowCards.com points out that you should pay close attention to your mail because such notices are easy to overlook:

They often come in nondescript white envelopes that are easy to miss and toss before reading. However, if you don’t respond, you are stuck with the rate increase.

If you decline the offer, send a letter to your issuer by certified mail.
Keep a copy of the letter for your records.

“Despite Pledge, Citigroup to Raise Credit Card Rates, Blaming ‘Difficult’ Environment” [New York Times]
(Photo: Spencer E Holtaway)


Edit Your Comment

  1. concordia says:

    Despite Pledge, Concordia to Stop Paying Credit Card Payments, Blaming ‘Difficult’ Environment.

  2. MrsLopsided says:

    BankOfAmerica did the same thing and jacked the rate on me a couple of months ago. I’d never missed a payment or gone over my limit. I took the option to keep the old rate and pay off my card over time. I can still use it but charging anything will kick in the new much higher rate on my entire balance.

    • Chris Walters says:

      @MrsLopsided: I think this is the typical opt-out agreement–you can’t use the card for new transactions if you refuse the new rate.

      If the NYTimes is correct, you’ll be able to keep using your Citigroup card until it expires.

      • muffingal says:

        @Chris Walters: The citibank representative told me the same thing about being able to use the card.

        If I remember correctly, you keep your rate until the card expires. I am just planning to pay it off. Screw Citibank.

  3. dweebster says:

    Boy, you’d think with all our taxpayer funds we’re giving to these assclown banks that they’d show us some sort of appreciation. Oh well, I guess the price of hookers and blow for the Citigroup execs has remained constant and they need to get that money from SOMEWHERE.

  4. stevejust says:

    It’s times like this, I yearn for the good old days. I mean, the good old days like Shay’s Rebellion days.

    You know what would be hilarious? If we took up Concorida’s advice above and just ogranized a massive, boycott of payments to Citi cards. If everyone just missed one payment, in a pre-determined month, their unilateral decisions to raise rates would likely disappear. Of course, the threat of that missed payment on your imaginary FICO score makes everyone say, oh noes, I can’t do that. But think about it. What if the consumers were to get a little organized?

    But doing the organizing would probably be a crime, or at least tortious interference with their contractual rights, and so it will never happen. But it should.

    • Orv says:

      @stevejust: I accidentally missed a single payment on my Citi card once and they jacked up my rate to 23%! They’ve refused to lower it to anything remotely reasonable since, except they inexplicably keep sending me 0% balance transfer offers. I just don’t use the card anymore.

      • Primate says:

        They’re sending you those offers so they can get more interest out of you. See, if you transfer a balance at 0% they’ll just apply all your payments to that 0% balance instead of to the 23% balance. More money for them, while screwing you.

    • lpranal says:

      @stevejust: As hillarious (and probably deserved) as a boycott would be, I have a feeling the government would intervene, somehow.

      I’ll give you a hint: it starts with “B” and ends in “ailout”

    • SScorpio says:


      Why wouldn’t they just screw over everyone and jack up their rates? If you really want to hurt them, just have everyone not use a Citi card for that month. Then they wouldn’t get the fees for any new transactions and you don’t have to worry about effecting your rate or FICO score.

      • stevejust says:

        @SScorpio: The answer is of course they’d jack up rates. And of course the missed payment would wreck people’s credit scores.

        But that’s why Citi has the power to raise the rates and we have the power to bend over and take it.

        It’s only when we all reach a sort of Fight Club-like level of anger for the way they’re being treated that things will change.

        While a month of merchant fees foregone would be relatively easy for them to absorb, a month of accounts payable foregone would actually have them scrambling for solutions. One could be to say, okay, we will no longer act unilaterally to change your terms if you as consumers non longer act unilaterally to miss your payments.

        This is really about power. There’s an old saying (dollar amounts change over time) that if you owe $10,000 to a bank, the bank owns you. But if you owe the bank $10 million, you own the bank. It’s all about reaching that tipping point, but the only way for individuals to get there is by collective action. Impossible, and probably illegal to organize. And that’s a lesson in power dynamics for today.

  5. lpranal says:

    hooray! Just in time for me to pay off my credit card, and keep paying it off every month, and taking their rewards.

  6. humphrmi says:

    I wonder if they’ll bother to raise rates for folks who religiously pay off every month. Oddly, I just recently saw my rate go down a couple points (I only noticed because I was checking for it) but that’s not to say it won’t go back up again.

    Ah well raising my rates is like buying lottery tickets. There’s a slim chance you might actually collect on that rate someday, but probably not. :)

    • crabbyman6 says:

      @humphrmi: That’s what my wife and I were thinking since we pay in full every month too, to me its the principle of it though.

    • oneandone says:

      @humphrmi: I noticed mine went down a bit (2%) also. Not sure what is was – I suspected it was the average of several different rates I have for purchases (special offers, etc). Or maybe my rate is tied to prime? Unlikely…. and I didn’t ask for a lower rate, so who knows. If they go back up, I’ll be upset enough to call and ask them to lower it, and probably start using another card, but I don’t think I would cancel it or let it expire. I guess I’m chained to the desire to keep the FICO score up & don’t want the closed account.

    • bishophicks says:


      I try to pay off my Citi balance every month. I have an automatic $100 payment set up which covers the minimum and ensures I won’t get hit with a late fee. But I set up the remaining payment myself. Once a year I might forget to do it in time or decide to pay a large bill over two months. So they probably only get $50 in interest out of me in any given year.

      I don’t particularly like this approach, but it’s a sound decision on their part: the people they consider higher risk have two choices – pay a higher rate, which mitigates the risk somewhat, or stop using the card and start paying it down which also mitigates the risk.

      Here’s the weird part – I’ve been watching my credit card statements (Citi and Amex Blue) expecting them to cut my limits. If I charged everything except for mortgage, taxes and insurance in a given month it might add up to 3,000, yet between the two cards my limit is a staggering 46,500 which I think is crazy. On my most recent bill I noticed that Citibank raised my limit by $1500. I think they are out of their minds.

    • roblarosa says:


      I’ve been paying off my Citi card each month before interest accrues for 4 years now. Just today I got a letter stating that my rate would go from 8.9% to 15.9%. When I called Citibank, I asked if they could do something about the increase. The rep stated that he could offer me a lower rate but that it wouldn’t be as low as my current 8.9%. I didn’t bother to ask what the new rate would be because I don’t want it going up at all so I opted out. He also mentioned that the rate increase “had nothing to do with my credit history” (Which is stellar.)

      If anyone gets such a letter in the coming days and wants to keep their card, it may be worth a shot to call and ask for a better rate.

  7. flugelhorn says:

    Will this affect a card with an introductory 0%-til-next-year rate? As in, is it going to take my 0% and make it “normal” 12% PLUS 2-3% come january?

    • jlayman920 says:

      @flugelhorn: It shouldn’t but if you have a balance on the card when your 0% expires then that may roll into a rate that was higher than was quoted when you signed up for your card.

  8. Crabby Cakes says:

    In related news, Citigroup executives take 2 week all expense paid business trip to Tahiti to “reorganize.” $500 wine will be served.

  9. J.Heck says:

    Wells Fargo did this to us last month, bumping our rate from 10% to a whopping 19.99%. They gave us the option to opt out by canceling the card in order to pay over time under the old rate. We canceled with them the following day. We’ve never missed a payment, have always well over-paid the minimum, and I will be happy to make my final payment to them in just a couple of short months. Way to go credit card companies! That’s how you retain customers… jack the rates up on the ones who haven’t done anything wrong (besides use your services)!

    • jusooho says:

      @citnos: Some would argue that using a CC in such a way to increase the balance every month, IS doing something wrong.

      • J.Heck says:

        @jusooho: But we’re not increasing the balance every month… we used the card to pay for a rather expensive but necessary car repair on my husband’s car and it will be paid off in 2-3 months. The card itself has been cut into little pieces and are probably sitting somewhere in the dump as we speak, and has been since long before this whole mess started…

    • Dawnrazor says:

      @citnos: Actually, from the CC company’s perspective, you ARE doing “something wrong”. By paying above and beyond the minimum payments, you are avoiding some interest charges and of course late fees.

      They increased your rate for the simple purpose of extracting more profits from you: If you continue to pay the same monthly payment as before, their profits increase because a higher proportion of that payment now goes for interest and fees, and it will take longer to pay off the balance.

      A “good” CC customer keeps the balance maxed-out (so that the CC company can charge over-the-limit fees and collect maximum interest) and only makes minimum payments (indentured financial servitude for the years or decades it takes to pay off a balance via monthly minimums).

      People who pay off their balances monthly or who pay substantially more than the minimum payments are actually LOSING money for the CC company (which is a good thing-the less people use CCs, the better-off the economy will be).

      • NotATool says:


        People who pay off their balances monthly or who pay substantially more than the minimum payments are actually LOSING money for the CC company

        They still make money on every transaction you charge via the transaction fees that the merchant pays. Sure, they LOVE it when you max out your card and make the minimum payments, but they aren’t going to lose money on the transactor-types either.

  10. kwsventures says:

    The rate increases are a direct result of consumers defaulting on credit card debt.

    • Sasha_Pie says:

      @kwsventures: Yea, brilliant strategy… Lots of people are defaulting? Why don’t we raise everyone else’s rates so that more people can’t make their payments!

      Bank of America already forced me to close my credit card with them because they wanted to raise my rates to something outrageous like 26% (even with an immaculate history). I guess we’ll have to close the Citi card too.

      I can only hope that people, including me, can learn to live without credit cards, and all these banks that were making money hand over fist for so long figure out what happens when you abuse your consumers.

      • Speak says:

        @Sasha_Pie: I’m with you there. I only carry one credit card, and I’m trying to switch to mostly-cash transactions. I think that’ll force me to be more disciplined (and realistic) about my spending.

    • muffingal says:

      @kwsventures: What consumers? I have not defaulted once and the rate increase they gave me from 6.74% to 14.99% is EXTREMELY unreasonable.

      They lost this consumer who had the card for close to 20 years. The reason I kept the card was because of my low rate.

  11. benalexe says:

    I hvae a checking account with overdraft at citibank. I was just notified that when Citibank uses the overdraft they wiill charge you a $10 fee. I thought that is what the overdraft is for? Am I missing something?

  12. davere says:

    A bit off topic, but I was making a payment on my Chase Disney card today and I saw that they have actually lowered my APR to 5.9% and they haven’t even written to me to brag about. That’s refreshing.

    • Cybrczch says:

      @davere: Chase just sent me notice that they’re changing my terms on my card from a fixed 8.49% to Prime plus… well, they won’t say what, but it can be anywhere from 0 to 24.99%, with a maximum total rate of 29.99%. In the same batch of mail, they sent me a card offer for a 0% for 1 year then 8.99% FIXED after…

  13. yso says:

    My citi bank card also went down from 7.9 to 6.9 magically this last statement. go figure.

  14. SKURRY says:

    I just got mail from them yesterday. Its funny because I had credit through them for a couch from the now defunct Wickes Furniture. I paid my couch off 6 months early while I still had 0% interest (I actually overpaid on accident by $25). My after promo rate was like 14.99%. That was 6 months ago. Yesterday I got a letter from them saying my interest rate was going up to 24.99%… why?

  15. bonzombiekitty says:

    meh. I have two citi credit cards, I pay them off in full every month. Rate increases don’t effect me.

  16. Imakeholesinu says:

    I actually checked my card today and it went down! I’m now at 9.99.

  17. Russs says:

    Looks like it is time to start watching the statement.

    I got rid of Chase for the same crap. I buy a house and they congradulate me with a 29.99% interest rate (was 6.99%). They said it was because I over extended myself with the house. Well, since there is 2 incomes paying for the house, I am FAR from over extending, and my balance on their card was 2k. That was paid off the next week, and chase was history.

  18. Anonymous says:

    The reason that some folks’ rates are going -down- is because
    these companies are separating the chaff from the wheat. People who had trouble with their card are chaff and will get an increase if they don’t opt out. But the company is betting (using their data mining software) that most of the chaff won’t mess with opting out and sending certified mail and such. Sooo, that allows them to make more money on fees and interest and reward the true “wheat” customers with
    a slightly -lower- rate. It is pure evil.

    • farker says:


      You honestly believe that? I pay my card off every month. There’s truly no reason to increase my Citi card rate. Statistically though, my age is probably a flag for them that I may still have a chance of going on some sort of spending binge.

  19. lastingsmilledge says:

    dear citi cardholders,
    thank you for generously contributing $20M per year to our baseball team in exchange for stadium naming rights for the next 20 years. if you wish to default on this agreement, please do so before opening day so that we can avoid the whole enron field scenario.
    the new york mets

    • nybiker says:

      @lastingsmilledge: I know your tongue is firmly planted in your cheek, but naming rights are just plain wrong. Ok, got that off my chest. Everytime a new yorker-with-a-citi-charge-card on the #7 train goes by the stadium, oh excuse me, ‘field’, they are going to get such a warm and fuzzy feeling from seeing the name that they’ll go out and charge some more on the card. I guess the naming rights will now serve to remind people of what bank to not bank with (same for ING, TD Bank, too). By the way, there is also a citibank park on Long Island for a minor league team (the ducks, IIRC). They got the stadium for that park when they bought the bank (EAB, I think) that paid for the naming rights originally.

  20. kwsventures says:

    I find living without a credit card balance rather easy. Paying credit card interest is a form of financial insanity. I collect interest. I don’t pay it. When times are tough, I just DON’T BUY ANYTHING that is not essential. After about 3 months of this lifestyle, I find it rather good. It has become a game. How little can I spend? How much can I save? Paying cash for almost everything makes you spend less. Pulling the greenbacks out of my wallet to pay is harder than throwing down the plastic.

  21. theblackdog says:

    I hope USAA doesn’t start doing this, though it won’t matter so much because my balances are still at 0% until January 2009.

  22. innout3x3 says:

    My BOA credit card from MBNA jumped from 17.99% to 28.34%. I read the changes and opt out info too late. Needless to say I paid off that POS card.

  23. ameyer says:

    I am not a lawyer, but wouldn’t unilaterally changing the contract like this render it null and void?
    Might be interesting to see if they could still collect money from these customers if they just stopped paying.

    • ameyer says:

      @ameyer: Also, they promised Congress they wouldn’t do this, so they potentially could be held in contempt of congress and/or face laws outlawing this crap.

  24. SgtBeavis says:

    Citibank can jack my rates up to 90% for all I care.

    It doesn’t really matter since I’ve had a zero balance on the card since 2004.

  25. dalvenjah says:

    They’re still doing the standard call-in-and-negotiate-a-lower-rate thing even with this, though. A co-worker just went from 15% (after the rate hike) to 8%; not spectacular, but at least it’s not horrendous.

    Like a few others said, they’re probably banking on the fact that most people will either toss the notice or won’t know to cancel or call in to request a lower rate.

  26. farker says:

    Just got my notification in the mail. APR is increasing from 13.99% to 19.99%. On principle, I’m going to call and ask for a lower rate, even though I don’t carry a balance. Simply an inappropriate way to treat someone who has constantly used a Citi card for the past 4 years.

    (I don’t carry a balance, I don’t know if that makes me rare, but if so, an even less incentive for them to increase my rate, because they won’t see any additional money from me.)

  27. Anonymous says:

    I have a citi card and I got the letter today. They’re raising my rate from 9.99% to the US prime rate PLUS 10.99% with a minimum rate of 16.99%. I have been a card holder with them for about 3 years. I always pay in full and on time so I’m definitely not a “good” customer. This is awful how they’re treating us. The good guys who pay off their balance/don’t carry a balance with excellent credit are being penalized. Good thing I pay my balance off every month so the interest rate doesn’t really apply to me. But I guess I won’t be able to brag about my low rates anymore. And I will continue to use the card to accumulate reward points. So they’re really losing money with me. I hear other card companies are doing this too. The only other credit card I have is a Chase. That’s currently at a 8.99% rate but I’m sure they’ll raise the rate too. I rarely use this card because it doesn’t offer any rewards.

    Long time reader, first time commenting :)

  28. LolitaJagar says:

    My rates just rent from 9.99 to 16.99… They didn’t even bother to try to keep me. They just let me opt out. The rep on the phone stated the cost of borrowing money has gone up so it needs to be passed to the customers. That’s interesting hasn’t the overnight lending rate gone down. Aren’t they getting money at extremely low APR’s from the government?

    Thats okay… Discover and Bank of America have been great and their rates have always been the lowest. I will just use those cards now.

    I just have some balance transfer’s locked in at 1.99 so once thats paid off the card is dead.

    I am also predicting that they will call up right before my card expires july of next year to try to get me to stay on.

  29. jeff says:

    I think congress should let citibank go bankrupt. Poor money management should not trickle down to the customers.

    The rep told me the rates are going up b/c cost of borrowing money is going up. I thought rates have been dropping?

    I wonder who would own all the debt if they went bankrupted.

  30. Anonymous says:

    Just got off the phone with citibank, did everything I could except talk to a manager (which in retrospect I should have) They wanted to increase my rate from 9.24 to 16.99, sorry I will not be having a 7.75 apr increase.

  31. Anonymous says:

    Just checked my bill yesterday. Had Citi since 1988 and they raised my interest rate from 14.9% to 29.9%. I guess thats their way of saying thanks for being a loyal customer for 20 years.

    Anyway, I exercised the opt out and will be looking for a new company to do business with.

  32. muffingal says:

    I received my letter Wednesday and my rate went up from 6.74% to 14.99%!!! I have had this card for close to 20 years and have not paid late. In recent years, I have very rarely carried a balance. At this time I have $800 on the card.

    When I called to Opt-out, the representative told me that she could reduce my rate by 2%. Either way, I felt smacked in the face and continued to Opt-out.

    So much for companies looking to retain reliable customers.

  33. yso says:

    Try almost doubling it. After lowering my rate to 6.9 last month, I got the letter saying it would go up to 14.99 in January. Thank you Citibank and f*** off. I’ll be closing the card ASAP.

  34. mpaquette says:

    This is bullshit. First they get a bunch of taxpayer money and now this. I got my letter today, my rate is going from 7.99 to 14.99. I have a balance, pay way more than the minimum each month and I’m never late. How much of a shitstorm can they rain down on me if I just never pay them back? Bastards.

  35. leaindc says:

    I just had my interest rate raised on my citi card by 6%, even though:

    -I pay on time
    -keep a very low(less then $500) or a zero balance
    -have a stellar credit score
    -have been a cardmember for 17 years

    When I called customer service for an explanation I was told that, “Due to current economic conditions” they needed to raise my interest rate.

    So I am thinking… why should citi’s risky financial decisioins impact my life? I’ve always been a responsible consumer, wasn’t that part of the agreement? And yes, I know about the “card service terms” I agreed to, which inform me they can raise my rates at anytime, but 6%?

    So citi is really that bad off that it needs 6% more from cardmembers on top of the something estimated at like $45 billion from TARP (which ha,ha we are all paying for)?

    After threatening to cancel both mine and my husband’s card, I was put on with someone else that actually gave me a lower rate than I previously had. So of course I took the new rate. If this happens to you, I urge you to call them and complain.

  36. Anonymous says:

    My sister-in-law oversees an escalation pool in one of their centers, and my understanding is that EVERYONE got hit with the most recent round. Every single cardholder. Period. Due to “current economic conditions.”

  37. Anonymous says:

    My Citicard rate went from 10.99% to 16.99%. Why? My credit score is 790-800–considered very good to excellent. I carried no balance with a credit line of $12K. There was low use and certainly no abuse–I did everything the right way.

    My note to them yesterday, 3-9-09:
    I do not agree to the new rates now. I did not agree with the rates in November. Close my damn account. I hope you assholes go out of business.

    This morning, my account was closed. THANK YOU, ShittyBank!