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Citi Finds A Way Around Credit Card Rules

Here’s a trick Citibank pulled before the Credit Card Accountability and Responsibility Act took effect last month in an effort to circumvent the new regulations.

Here's a trick Citibank pulled before the Credit Card Accountability and Responsibility Act took effect last month

Two of the act’s most important provisions require credit cards to:

  • Provide 45 days notice before raising rates, and the new higher rate can’t be imposed on existing balances, just new purchases.
  • Wait until customers are 60 days behind on their payments before imposing a higher penalty rate on their accounts.

But Citi mailed a change of terms letter to some customers before the act took effect that allows it instantly raise the interest rate from 8.99% to 29.99% despite the new regulations.

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