I have been reading many articles lately regarding the shady practices of credit card companies lowering credit limits and increasing interest charges on accounts of self proclaimed “good customers.” But I am left confused as in the past week Citi has INCREASED the credit limit on my card by $300 and DECREASED my interest rate by .50%.

The card is a student Citi Dividend Platinum Select, considered to be higher risk as a student, and has been open for a few years. I pay the balance in full each month and never max it out. I have also seen rates on my other lines of credit decrease significantly this year, many to as low as 10%.

Citi has said:

“…will not voluntarily increase the rates or fees on the account until the card expires … the only reason we would consider increasing the rates or fees before the card expires would be if a cardholder pays Citi late, exceeds the credit limit, or pays with a check that bounces. We believe we are the first bank to adopt this policy.”

So, my advice for those that are seeing their rates increase, make sure you really think about your payment history, usage habits and other possible criteria for the increase. Afterall, what good does it do Citi to piss off their best customers by raising rates?

[tags]citi, credit card, interest rate, shaun carter, debt, consumer, charge card, balance transfer, subprime[/tags]