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Congress has held hearings twice this year to grill credit card executives
on their fees and billing practices, and the added heat on plastic providers
may leave you with more cold cash.
Citigroup has dropped the "universal default" penalty on all its
cards. This clause allows card issuers to boost interest rates to as much as 35
percent if a cardholder is late paying any other, unrelated bill—such as
a mortgage—even if the customer has never been late with a credit card
payment. To see if your card carries a universal default penalty, contact your
card issuer.
Citigroup also announced it would cease its "any time for any
reason" interest rate increases. An "any time" policy gives a
card issuer carte blanche to boost interest rates without an
explanation—even for customers who have met all payment and deadline
terms.
The company is reserving the right to raise rates and fees on existing
accounts only if cardholders pay late, exceed the credit limit or if their
payment check bounces.
While the Chase Visa available to AARP members has always used daily average
balance to calculate interest, Chase Card Services is switching its other cards
to that method and abandoning two-cycle billing. The change will reduce finance
charges for anyone who chooses not to pay off a new purchase in full.
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