Citi raises interest rates on 15 mn credit cards: report

Troubled financial major Citigroup has sharply raised interest rates on about 15 million US credit card accounts, a move that could draw political ire against treatment extended to consumers by banks, which received government aid, a media report has said.

Troubled financial major Citigroup has sharply raised interest rates on about 15 million US credit card accounts, a move that could draw political ire against treatment extended to consumers by banks, which received government aid, a media report has said.

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"Citigroup has sharply increased interest rates on up to 15 million US credit card accounts just months before curbs on such rises come into effect, in a move that could fuel political anger at the treatment of consumers by bailed-out banks," the Financial Times said.

The banking entity, which is about to surrender a 34 per cent stake to the US government as part of its latest rescue, had increased rates on 13 million to 15 million credit cards it co-brands with retailers such as Sears, the report said citing people close to the situation said.

The report noted that Citi's rate increases emerged on the day the government proposed legislation to create a new regulator with sweeping powers on consumer protection and a week after the bank was attacked by some politicians for raising employees' salaries.

Further, FT quoted a Citi statement as saying that, "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."