Citibank (NYSE: C) has recently sent out letters to untold numbers of consumers that their credit card interest rates were going to increase, but now the company is offering some of its customers a way to lower the interest rate that they are paying, but it’s not without a catch.
Citibank is offering lower interest fees for credit card customers that meet a monthly spending requirement that’s dependent upon the person’s credit history. In some cases, this mandatory minimum spending fee could be as high as several hundred dollars. Customers that meet the spending minimum will be eligible for a rebate on their total interest charges each month.
As the federal government clamps down on highly-profitable and controversial practices in the credit card industry, banks that offer credit cards are looking for new ways to pad their revenue streams. Some banks are beginning to charge annual fees to credit cards that were previously fee-free. Others are raising credit card interest rates and cancelling cards for customers that they no longer deem as profitable.
Citibank has responded to the legislation by raising many of its customers’ interest rates to 29.99%, even for some customers with excellent credit. Citibank has also cancelled certain gasoline-related credit cards with little to no notice.
Several of those customers have commented on American Banking News’ articles about the rate increases and consumer sentiment about the company’s move is less than favorable.
