Reposting as this is now official and has been agreed upon by Citi.
Citi will refund $335 million to U.S. customers who should have had a lower APR. This affects 1.75 million credit card accounts since 2011 and. The issue was caused because the method Citi used to determine APRs didn’t properly account for good behavior such as paying your account on time. The Credit Card Accountability Responsibility and Disclosure (CARD) Act of 2009 requires card issuers to review accounts who have had their APR raised to see (penalty APR) if they should be eligible for a reduction due to good behavior.
This error accounted to 10% of interest rate reductions customers were due with 90% being properly calculated. Citi has stated that checks will be sent out to affected customers in the second quarter of 2018. Hopefully most readers of this site won’t be affected as you never want to be paying the high interest rates card issuers charge anyway. Citi having an IT issue doesn’t exactly surprise me either.
So, when I was young and dumb (and broke, and spending too much money I didn’t have), I carried a balance on a Citibank card. In 2009, even thought I’d never missed a payment, I had a high utilization, and they raised me up to the 29% maximum interest rate, and kept it there for quite a while. I’ve since paid off my balance in full and learned my lesson. But yesterday, I got a check in the mail for just under $200, looks like it’s related to this settlement.
Doc – you may want to give this post an update, noting that checks have gone out. Readers may want to actually open any envelopes that come from Citi, rather than junk them assuming they are the usual balance transfer checks or other junk mail.
This is the bank that I had to call 10 times to get the checking account sign-up bonus.
I don’t understand how the magnitude of this could be true. I guess it would just have to be for somebody that’s a very hands-off or something. I always make it a point to keep in contact with banks just so I know what’s going on. And I regularly ask for interest rate reductions. In fact I have a Citi double cash card that is at 5.74% you can’t beat that in this economy
Why ask for a reduction if you never carry a balance?
Unless they reduce it to 0%, in which case it pays to carry a balance.
I carried a balance and paid interest on a Citi card in 2011 and 2012 but then paid it all off and closed the card. I wonder if they will try to track me down and give me a refund on some of that interest.
With an 800+ fico scores with all bureaus, I should have 0% APR for life. I wonder if am getting part of the loot even though I never pay credit card interest.
lol that’s not how “refunds” or for that matter APRs work. But crazier things have happened when it comes to our fav Shittibankgroup
wat
+1
Keep dreaming. Maybe if you churn 0% intro rate cards, you can have 0% for a few years at least. Maybe a lifetime if rates continue to stay low. But Citi isn’t gifting out other people’s paid interest to non-payers.
You have a lot of reading to understand how rewards cards work. The banks always charge higher interest on the rewards cards. Doesn’t matter if you get your credit score all the way up to 1500! /s
It took 8 calls to get the $300 bonus for opening a Citi checking account. No more Citi account for me.
but at the end of the 8th call, you got it, so I categorize that as success hehe
Cant wait to get my check for $1.47
If you divide 335/1.75 its a lot more than $1.47. Unless of course, you only paid interest like 1 month.
I only said that because we received a check from Citi in that amount hehe..
A long time ago, before I knew better than to carry an account balance, but still had never had a late payment, I contacted Citi about this and to make a long story short they gave me $100 statement credit. I’m looking forward to seeing whether there’s something else coming down the pike…..
why would you want to carry a balance?
Occasionally you will run into somebody who believes that the credit card company deserves to get a small cut in order to keep them alive, or to maintain the privilege of them giving you an account, or that somehow wise & responsible use of credit means carrying a balance and paying it down over time. Then, there are the people that aren’t capable of paying off the entire balance every month. It does happen. Some people are very regimented in their budgeting and won’t allow their savings to dip if they need new tires for their car, for example. They literally sleep better knowing they still have a nest egg vs. a monthly payment.
Most know better… But not everyone does. I keep seeing news articles about how the credit card debt is at the highest level in years, higher percentage-wise than it was last stock market crash/financial crisis, so maybe I am giving too much “credit” to the average person.
Yeah, I’ve definitely met those people who really believe that VISA and Mastercard deserve our money and I find it really astonishing.
I didn’t “want” to carry a balance, but I used to have a really variable income and a reluctance to dip below a certain amount in savings, so for a while I did sometimes have a balance. I also was a really broke grad student at one time and emergencies would sometimes go on cards until my fellowship checks paid out, etc. At this point I haven’t had a balance in 5+ years, but I probably did sometimes in 2011/12. Also, I had an issue with a penalty APR despite not having ever made a late payment, which I believe is why I originally had the $100 statement credit. I had no idea that I wasn’t the only one.
Is this only for people who paid interest?
Nope. I received a small check for my Citi Hilton Reserved card. Never left a balance on the card to pay interest.
Was it for this issue or something else?
Doubtful it was for this as these checks havent been released as if yet.
Looks like
I think most readers here never paid interest, would like to know as well!
it sounds like its only for people who had a penalty apr applied(likely due to being late on a payment) – then after 6 months of good behavior may have qualified for an apr reduction but didnt get it. so yeah, it would only be people who paid interest on a penalty apr.
Not only for people that paid interest, but for people that had a penalty APR applied.