Corporations are always looking to increase their profit margins, and who can blame them? After all, everyone wants to make more money! When a corporation is in search of higher profits, they don’t always stop and think what’s best for the consumer, rather they focus on short term profit increases. The credit card industry has been one of the worst offenders in this area. They’ve increased late fees, added provisions which make it much easier to raise one’s interest rate, and added all sorts of anti-consumer provisions in the cards which make them much less desirable financial tools to use. Consumers weren’t happy about universal default and other questionable decisions, and now one bank has decided to take a step in a direction of becoming more consumer friendly.

Earlier this month, Citibank announced that it would be changing practices in its credit card business, ending two very questionable financial practices which have been part of cardholder agreements in recent years. First, Citi is eliminating the “universal default” provision, which basically made it so that they could raise your interest rate on a credit card if you were late on another account at a different bank, even if you were on time with your credit card payments. Most credit cards contain this provision, but now Citibank is going to be one of the very few exceptions to this rule.

Another change that Citibank is making is eliminating the ability to change one’s rate for “any time or any reason.” Generally credit card companies think that they should be able to change a consumer’s rate as they please in response to changing market conditions. Many people who had excellent interest rates with some banks have found that their great deals have been suddenly disappearing when the federal reserve of the free market shakes up the going interest rates. Citibank will now be an exception to this common practice in
the credit card industry.

Citibank will still be able to raise your interest rate in the event that you are late on your credit card payment, happen to go over your limit, or pay with a check that bounced. The changes will go into effect immediately for new customers, and will go into effect by April for existing customers.

Overall this is a very great PR move for Citibank. Consumers are getting tired of having to deal with shady business practices by many credit card companies, and now Citibank is moving in a direction which is more consumer friendly.

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