Citi Bank Eliminates Fees

Citi ends some controversial credit card practices…

The issue of predatory lending was recently raised by several members of the Senate Banking Committee at a series of hearings on credit card policies. In response, it appears that Citibank has heard the cries of the public by announcing the termination of two of their most controversial credit card practices:

1. Universal Default – Until now, if a borrower missed a payment with another lender, their interest rate could be increased regardless of their payment history with Citibank. Citi gave customers the right to opt out of such increases in the past. But with this announcement, Citi is abandoning the practice altogether.
2. Anytime Increases – Rates and fees that can be changed ‘for any reason’ will no longer be policy. As long as the borrower does not go over their credit limit and makes their payments on time, Citibank will not change the interest rates or fees until the credit card expires and a new one is issued (usually every 2 years).

Vik Atal, Chairman and CEO, Citi Cards NA, said: “We believe that making changes to what have been – until now – basic credit card practices is proof of our ongoing commitment to put our customers first.

John Taylor, President and CEO of National Community Reinvestment Coalition, said: “We applaud Citi’s move to eliminate ‘universal default’ and ‘any time for any reason.’ Clearly this raises the bar for the industry and protects consumers in a way that other issuers do not.”

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