[IP] New Citibank Changes allow 30% Interest rate on credit cards
Begin forwarded message:
From:
Date: May 30, 2005 6:28:01 PM EDT
To: dave@xxxxxxxxxx, frisbee2@xxxxxxxxxxxxxxx
Subject: New Citibank Changes allow 30% Interest rate on credit cards
Please strip my e-mail address if you forward this out.
I have (maybe not for much longer if I find a decent alternative) an
AT&T Universal card, owned by Citibank.
I usually pay on time and have excellent credit, but I was troubled
by what I read in their latest changes in terms. Although the fact
that they have the right to do this does not guarantee they will -
but the fact that they can scares me greatly. To me 30% APR is
usurious and should be limited to only the most extreme cases, it
should not be a 'normal alternative' if a customer is one hour late
on a payment.
Basically, Citibank has a 'two tiered' interest rate one for 'normal'
and one for 'default rate'. I understand raising the rate for
perpetually delinquent customers:
---- From their latest Changes document ----
...
"Default Rate: All of your APRs may increase if you default under any
Card Agreement that you have with us because you fail to make a
payment to us when due, you exceed your credit line, or you make a
payment to us that is not honored. In these circumstances, we may
automatically increase your APRs ... ANNUAL PERCENTAGE RATE is
29.97%..."
------
Basically as a non-lawyer I interpret this as follows. IF ANY of the
following happen then they can INSTANTLY raise your rate to 30%, with
no obvious:
1: The post office accidentally takes an extra few days (or worse
loses) your on-time payment.
2: Your bank accidentally or incorrectly bounces a check you made for
your credit card bill.
3: When making a purchase, if Citibank incorrectly allows a purchase
which puts you over your limit.
I did NOT however see a clause that gives them the right (which I
have heard Capital One USES) to up your rate if you are late to pay a
DIFFERENT credit card, even if you are on-time with theirs.
Aren't there any laws which prohibit rates that high?
Is there any legal recourse, say if your payment was delayed due to
the post office, and they raise your rates anyway?
-Eric
-------------------------------------
You are subscribed as roessler@xxxxxxxxxxxxxxxxxx
To manage your subscription, go to
http://v2.listbox.com/member/?listname=ip
Archives at: http://www.interesting-people.org/archives/interesting-people/