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.

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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