Editor’s Note: At the time of publication, Citi had only raised rates on a few store branded credit cards. For information on the current Citibank credit card interest rate increases, see this article.
Much has been made today about Citibank raising interest rates on consumers. However, it appears the increases are only tied to co-branded store credit cards issued with Macy’s and Sears. According to reports, the interest rate increases average 3%. The media, however, has turned this into a headline story when, compared to the actions of other banks, this is a rather small increase.
Late last week, Chase raised minimum payments for some consumers by 150%, from 2% of the balance to 5% of the balance. This has put many consumers on the brink of default, as once manageable payments have ballooned into mortgage sized responsibilities.
Similarly, Chase, Capital One, and a wide array of other banks have been sharply increasing interest rates on broad swaths of consumers with solid credit histories.
Perhaps the fact that Citibank is a semi-nationalized bank is causing this big uproar. But ultimately, Citibank’s decision to raise rates on already high interest store credit cards people should not have been carrying balances on in the first place is one of the least newsworthy credit card headlines of the past six months.