Credit Tips: Credit Card Interest Rates Raised Due to Other Creditors

Posted On: February 1, 2006

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Posted: Thu Jan 13, 2005 4:34 pm
Post subject: Credit Card Interest Rates Raised Due to Other Creditors

Jamie Sutherland
Date: 4/21/2000 0:22 am CDT

I stumbled upon your site after searching for consumer oriented sites
with credit card information.

I received a “Notice of Change In Terms to Your Citibank Card Agreement”
recently. Within this notice lies this gem, “In addition, the annual
percentage rate for purchases and cash advances may vary if you default
under any Citibank Card Agreement because you fail to make a payment to
us OR ANY OTHER CREDITOR WHEN DUE (emphasis mine), you exceed your
credit line, or you make a payment to us that is not honored by your
bank. In such circumstances, we may increase the APR on all balances to
a higher rate of up to 14.99% plus the Prime Rate, currently up to
23.74%.”

Is this legal???? If someone makes a late or misses a payment to Sears,
Mervyns, or whoever, Citibank can at their discretion increase the APR
to nearly 24%? How can a third party problem between Jack and Jim give
Bob the right to take a bite out of Jack?

I’ve received offers including these type of terms and always tear them
up. I assumed they were barely legal institutions…..but Citibank?

Is there any legislation pending or being developed to void this type of
predatory practices. Does anyone know if there any class action suits in the works?

archive
Posted: Thu Jan 13, 2005 4:34 pm
Post subject: Credit Card Interest Rates Raised Due to Other Creditors

Eugene Skorodinsky
Date: 4/25/2000 0:14 am CDT

Jamie Sutherland wrote:
——————————-
> “In addition, the annual percentage rate for purchases
> and cash advances may vary if you default under any
> Citibank Card Agreement because you fail to make a
> payment to us OR ANY OTHER CREDITOR WHEN DUE…..”
> Is this legal????

Absolutely!

> If someone makes a late or misses a payment to Sears,
> Mervyns, or whoever,

… they become a higher “risk” for other creditors as well, so…

> Citibank can at their discretion increase the APR to
> nearly 24%?

Yes, it can. Whether it will, though, is a question. They might loose you if they will, and they don’t want that, at least not untill you show real signs of risk.