15 million Citibank card holders will pay more, bank evading Fed's rules

Got a Citibank credit card, or any one of the co-branded cards, including Sears and MySpace, among many others? You may have hoped you'd be safe from unreasonable rate hikes thanks to new Federal constraints on banks' ability to raise rates for borrowers. But those laws don't go into effect until February 2010, and for Citibank, there's no time like the present.

According to the Financial Times, Citibank has already raised rates for you -- and you -- and you!

As many as 15 million U.S. card accounts in total. And the increases are big. A Credit Suisse analysis of the past several months' data indicates that rates were up an average of 24% between January and April of this year. That represents a three percentage point increase for those who don't pay their balance in full each month. For instance, if your rates were 10% before, now they're 13%; this would represent about a $200 difference in the amount of interest you'd pay in a year on a $5,000 balance.
Citigroup, in response to the report, released a statement, saying "We have adjusted pricing and card terms for some customers as part of our regular account reviews. This is an ongoing process to ensure we offer terms, interest rates, credit lines and products based on individual needs and risk profiles. These changes also reflect the dramatically higher cost of doing business in our industry as we work to preserve the broad availability of credit."

Really? Regular account reviews? This is corporate profit protection, plain and simple, an enormous bank on the verge of becoming property of the U.S. government, taking out its neediness on the American cardholder -- who is locked into the marriage by the virtue of unemployment and other financial woes. It's a co-dependent relationship with a financially abusive partner, and we're the unhappy, credit-bruised enablers. Citigroup has raised rates further than other banks, and the Financial Times adroitly writes, it's a "move that could fuel political anger at the treatment of consumers by bailed-out banks."

Could, will, did. Are you angry, too?
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