Economy
Citigroup: Imposing spending requirements? |
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| Economy | |
| Written by Roberta Murray | |
| Friday, 20 November 2009 | |
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Citigroup retail customers must allegedly spend more to gain lower interest rates.
Citigroup (NYSE:C) is hiking consumer lending rates in an attempt to return to profit. Citibank credit cards are said to be introducing a minimum spend amount; said to be $750 a month by Candice Choi at TDN.com Citigroup will initiate a rebate on the total interest charges for that month should a particular customer meet the minimum spend. The rebate could cover some or all of the interest rate hike. Customers also need to make payments on time to qualify for the rebate. With 92 million credit cards in circulation last year, Citi was the second largest card issuer in the country, according to CreditCards.com. Chase was the largest with 119.4 million cards, and Bank of America was third with 80.2 million cards. TDN.com say the change by Citigroup comes as the industry rushes to adjust to sweeping reforms to start in February that will limit when and how much card issuers can hike interest rates. In a statement, Citigroup said the actions were necessary given elevated losses from souring loans and "regulatory changes that eliminate repricing for that risk." The bank also noted that "customers who do more business with us will have the most opportunity to reduce their rates." Of course, consumers could need to spend more than they otherwise would to qualify.
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