Question
I carry a low-fee Visa Signature card from Citi that is tied to Hilton HHonors. My wife carries a second card, same account. It's our everyday Visa, we run up monthly charges from $1,000 to $3,000, and I usually pay in full every month.
This month's statement shocked me: the "Annual Percentage Rate" for purchases had been boosted from the usual 18.25% to 36%. I pulled six months of statements and they showed all on-time payments and no late fees. I called Citi and the agent said I'd done nothing to warrant a 36% interest rate, said I had an excellent payment history, thanked me for my business and manually knocked the rate back to 18.25%.
It's not a big issue operationally as I hardly ever carry a balance over. But I was contemplating it this month as we'd run up higher than usual charges and taxes are due shortly. Now, though, I'm paying Citi in full immediately and watching future statements like a hawk.
What happened? Did some action of mine trigger a flag in the Citi system, or were they simply hoping I wouldn't notice?
Some other part of Citi, at least, thinks I'm a good customer -- they're always sending me 4.9% balance transfer checks tied to another Citi card I hold but rarely use.
Answer
I carry a low-fee Visa Signature card from Citi that is tied to Hilton HHonors. My wife carries a second card, same account. It's our everyday Visa, we run up monthly charges from $1,000 to $3,000, and I usually pay in full every month.
This month's statement shocked me: the "Annual Percentage Rate" for purchases had been boosted from the usual 18.25% to 36%. I pulled six months of statements and they showed all on-time payments and no late fees. I called Citi and the agent said I'd done nothing to warrant a 36% interest rate, said I had an excellent payment history, thanked me for my business and manually knocked the rate back to 18.25%.
It's not a big issue operationally as I hardly ever carry a balance over. But I was contemplating it this month as we'd run up higher than usual charges and taxes are due shortly. Now, though, I'm paying Citi in full immediately and watching future statements like a hawk.
What happened? Did some action of mine trigger a flag in the Citi system, or were they simply hoping I wouldn't notice?
Some other part of Citi, at least, thinks I'm a good customer -- they're always sending me 4.9% balance transfer checks tied to another Citi card I hold but rarely use.
It could be something else on your credit report, e.g. high balances, new credit cards, other issues, etc. You should ask them why and check your credit report. Also, Citi claims that they no longer engage in Universal Default. Ask them to revert to the previous rate.
Answer
Citi sends out an interest rate notifcation letter. It's looks a lot like junk mail or a privacy statement. It could be that they are treating the card like they treating the legacy Dividends cards. Bumping the interest rates, and reducing the cash earnings to ween people off the card.
Answer
Citi claims that they no longer engage in Universal Default. I'm pretty religious about on-time payments, so that's not it. And my credit report has actually cleaned up somewhat in the last year or two as I've normalized card use. It's weird.
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I'm pretty religious about on-time payments, so that's not it. And my credit report has actually cleaned up somewhat in the last year or two as I've normalized card use. It's weird.
Just ask them to change it back. I have had them increase my rate for whatever whimsical reason they thought made sense. I called, asked them to change it. They did...
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"Annual Percentage Rate" for purchases had been boosted from the usual 18.25% to 36%.
Did you perchance have any foreign currency transactions on the card during this billing cycle?
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Did you perchance have any foreign currency transactions on the card during this billing cycle? YES. I was in the UK in the early part of the billing period and posted a couple of small (<$100) charges in GBP for petrol and books. Why? What might the connection be? :confused:
Answer
Citi charges 3% foreign currency transaction fee, and they display this as an "annualized" rate (3 x 12 = 36%) even though it is transaction based. The fee is a finance charge but it is not interest. The rate is separate from, and has no affect on, the rate of interest you would pay if carrying a balance.
"For each purchase made in a foreign currency, we add an additional FINANCE CHARGE of 3.0% of the amount of the purchase after its conversion into U.S. dollars. This foreign currency transaction fee will be added to the appropriate purchase balance with the foreign currency purchase. The foreign currency transaction fee may cause the annual percentage rate on the billing statement on which the purchase made in a foreign currency first appears to exceed the nominal annual percentage rate."
Earlier discussion here...
http://flyertalk.com/forum/showthread.php?t=649486
Answer
Mia, that's exactly it. Thank you very much. ^