As Americans, we have a bittersweet relationship with credit cards and the shadowy puppet masters who influence us to use them. Most of the time we have to peer over our shoulders just to make sure a stranger isn’t taking a picture or jotting down the numbers when we go through a self-checkout aisle. Credit card fraud is alive and well, and growing larger even with new chip technology. What we don’t expect as credit card users is a huge refund. Citi customers might get just that.
The credit card company is poised to issue a combined $335 million to card owners later this year, and each individual payment could average about $190. That’s not too shabby, especially when we’ve come to expect shady business from these companies. So why the refund, then?
Naturally, that’s where the shady part comes into play. The company improperly implemented systems to reduce customer interest rates after the usual penalty period elapsed from a missed payment or two. The Credit Card Accountability Responsibility and Disclosure Act of 2009 (CARD) guarantees that card owners will rise out of delinquency interest rates as soon as they begin to make payments on time again. That’s not what happened for everyone.
Citigroup acknowledged that about 10 percent of cardowners continued to be hit with the increased interest rates illegally. That amounts to nearly two million credit card accounts. This mess dates all the way back to 2011, as soon as the CARD Act enforced the new rules.
Citi has declared the payments will commence at some point this year, but hasn’t set an exact start or end date. While most users can expect an average of $190 refund, the exact payment will reflect the amount of credit card debt and the interest rate from 2011 until the mistake was rectified. If you’re that far down the hole, you stand to gain a much bigger refund!
If you’re having trouble reducing the credit card debt you owe, you might benefit from financial advisement. You might also find a balance transfer to another card with a lower interest rate if yours is too high. Shopping around can do a lot of good, depending on the circumstances. If you think you were the victim of fraud, then talk to your credit card company immediately to put a hold on your card and launch an investigation. If you think wrongdoing occurred by the company, find a lawyer to take your case!