People are outraged lately with Citi (C), because the bank is jacking up credit card rates and cutting of customers without notice. We asked them for comment and here’s what VP of Public Affairs Samuel Wang had to say:
“Citi has decided to close a limited number of Oil partner co-branded MasterCard accounts. Citi continuously evaluates how to best meet the needs of its retailer partners and, in consultation with our partners, we periodically make adjustments to the products we offer consumers.”
That’s not too helpful, and it doesn’t address the thousands of people who have had their interest rates jacked up to 29.99%.
So we pinged Bill Hardekopf, CEO of Lowcards.com on the matter, and here are some key points he mentioned:
- Citi had 92 million customers signed up for credit cards as of February 2008.
- Default rates have increased in the past weeks. Additionally, delinquency rates (people paying 35 days late or more) have jumped up to 5.5%. Assuming that Citi somehow retained all 92 million of its credit card customers, that’s over five million people. That’s no chump change.
- “Citi is looking for ways to shed risk and credit cards are a great way to do it.” says Hardekopf. He mentions that if you mess up in the slightest, Citi will penalise you through a rate hike. This happened to his daughter who he claims has perfect credit and has been a Citi customer for over five years. She had one late payment in the past four years and apparently, that justified a rate increase to 29.99% – just like the rest of our readers.