Citigroup Considers Repealing a Pledge, and the Slogan With It [Return of the Universal Default]

The New York Times ^ | 2008-06-25 | Eric Dash

[rabscuttle385]

LAST year Citigroup made a promise to millions of people who flex its credit cards: “A deal is a deal.” The slogan was used to trumpet an announcement that the financial giant would no longer reserve the right to raise interest rates on cards at any time, for any reason.

But Citigroup’s deal is only a deal until it isn’t. The company is quietly reconsidering its pledge as it confronts a host of financial troubles, according to Citigroup executives. A decision could come this week. Samuel Wang, a spokesman for Citigroup, declined to comment.

Several Citigroup executives emphasized the “deal is a deal” slogan before members of Congress and to consumer groups. The pledge helped Citigroup fend off greater regulation of the card industry and distinguished the company as an industry leader.

As part of the promise, Citigroup said it would abandon a practice known as “universal default,” in which card issuers raise a holder’s rate when that person is late paying any bill, even one unrelated to the credit card account. Citigroup also said it would no longer reserve the right to raise rates at any time, although it retained the right to raise them every two years, when cards are renewed. The pledge was never intended to be good for the life of an account.

[the invisib1e hand]

so, what's NYT's real beef with Citi? It's ties to the clintons?

[E. Pluribus Unum]

You never have to worry about any of this stuff if you refuse to carry credit card debt.

If you don't have the cash, you can't afford it.

[rabscuttle385]

You never have to worry about any of this stuff if you refuse to carry credit card debt.

Even the best financial plans can be destroyed by a succession of severely negative events (death, medical bills, unemployment, and so forth).

[E. Pluribus Unum]

Even the best financial plans can be destroyed by a succession of severely negative events (death, medical bills, unemployment, and so forth).

I absolutely agree, but most people in trouble with credit cards did it from a lack of discipline.

You don't need new cars and new furniture and $150 a month cable TV and 42" HDTVs and you don't need to eat out every day.

If you can't pay cash for those things, you buy used and you watch your old Magnavox with rabbit ears and you make rice casseroles.