As I wrote earlier, the average default rate is about 29.99%. In that article, I quoted the standard, and complicated, language about default rates found on a typical credit card application. Today, I got a glimpse into what the future of credit card terms will look like when my wife got a Citi 0% credit card offer in the mail.
In this Citi offer, the language was plain and simple. Here’s what they wrote:
If you default under any card agreement you have with us because (of the following)…all of your APRs will automatically increase to the default
- (You) do not make the minimum payment when due
- (You) go over the credit line
- (You) make a payment to us that is not honored (i.e. a bounced check)
These were the terms. Plain and simple. They are the exact terms that have always been in play. However, you used to need monocles to read them. Such is not the case with at least Citi today. They are spelling things out plainly.
Yes, accidents do happen. A payment might be late because you were on vacation, a check might bounce because a deposit didn’t clear. In the past, it was much easier to get a credit card company to overlooked these mistakes. Today, if any credit card company can charge you the default rate, they will. However, at least Citi is making the rules a little clearer, and I applaud them for this step in the right direction.
Recently, I’ve been struggling to find a safe credit card company to recommend to visitors of this site, as so many companies have been really sticking it to consumers. Late Friday, well past the time a reasonable person should be investigating the credit card market, I stumbled upon the realization that Citi was becoming a good company. And the fact that they are clearly laying out the terms that can trigger credit card default rates is further proof to me that they are the first company enacting truly fair credit card practices.
For more information about Citi credit cards, please see the 0% balance transfer credit card comparison section of this website, where you can view offers and apply online.
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