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Citibank’s Universal Default Clause…Buh Bye!!!


One of the things I fear most as a credit card holder is the unfair Universal Default clause. If you haven’t heard of it, you should read up on the link I provided.

Many credit cards have this clause in the fine print, and what it enables them to do is to raise your interest rates through the roof if you are over 30 days late on any other payment to anyone. Key word there is anyone. You could be over 30 days late on your telephone bill and be penalized by your credit card company.

I try to bite my tongue when I feel like calling credit cards evil. But really, the universal default clause is an evil thing.

But I am jumping up and down for joy because one of the major credit card companies, Citigroup, has done away with the universal default clause!! That is awesome news!!! And it gets better!

Citigroup also “will no longer raise rates and fees on customer accounts ‘at any time for any reason'”. This is HUGE news!!!

Wow. I did get my electric bill in the mail today and I was pretty bummed (more later on that), but this news is EXCELLENT!!

Times are changing for the better!

(I don’t think I’ve ever used so many exclamation points in a post – can you tell I’m happy?? 🙂 )

[Hat tip to Frank the F.S.A.]


  • Reply debt group |

    That’s good news about citigroup. You know, I’ve found them to be the easiest to deal with regarding my debt. Chase and AMEX have just been nasty, but dealing with citicards has just been a pleasure. Weird.

    Hey, you are almost to 100K visits on your site meter! Congrats.

    I’ve started a social community site for people with debt and i’d love to have you in the group. It’s based on the new ning.com platform and its just great. We could even RSS feed in your blog.

    Anyway, love to have you, keep up the great blogging:


  • Reply JW Thornhill |

    This is unbelievable! I always knew that they could raise the interest rate if you were over 30 days late to them. But, to be able to raise the rates simply based upon being late to anyone should be criminal.

    “Thus our national circulation medium is now at the mercy of loan transactions of banks, which lend, not money, but promises to supply money they do not possess” Irving Fisher, economist & author

  • Reply Amanda |

    As someone that has nearly a $20,000 balance on my Citibank card, that’s very good news. 🙂

  • Reply Rich |

    I also got a great offer from Citi for both of my cards. It’s really been a motivator. Watch your mail for this one:

    Any payments made OVER the minimum payment in the next 4 months on any of my accounts will accrue and extra 10% payment through the “Payment Partner Plan” They’ll match 10% of your above-minimum payment up to $550!!!

    This is a great opportunity! I took advantage of both these offers, then transferred $5500 from both cards to a new 0% interest for 13 months, no balance transfer fees card and in exchange I am getting a free $1100!!!!! from Citi! This will put a nice dent in the debt.

    I have ALWAYS loved the way Citi treats its customers, and this is just another example of why all my Chase accounts are closed and most everything is with Citi!

    Any other details you want to know about this offer, let me know! There are no hidden costs and no fees to join the program. It sounded too good to be true to me too, but I asked and asked and there are no catches! Just need to make sure to pay the payments on time for the next 4 months!

  • Reply mapgirl |

    THANK GOD! I was wondering if someone would just do away with it. They know they are going to attract a hell of a lot of customers by getting rid of it. YAY! I’m glad!

  • Reply Sarah |

    I think it’s evil. I have a Chase credit card and the minimum payment was $40 a month. I was working on another credit card and had an automatic payment thing going. One month they increased it to $41. I didn’t catch it, so not only did they charge me the $40 fee for the “late” payment, and increase my interest rate to 28.5%, ALL of my credit card rates have gone through the roof. That $1 has turned out to be very, very expensive.

  • Reply Donna |

    Citi card has always worked with us (15 year old account) even though we thought they weren’t going to when we had some major problems recently but with some pushing they decided to close our account supposedly forever and gave us 6 months no interest and low payments. They then offered to reopen the account. So now we won’t have a closed account on our credit report. Chase on the other hand made us go through so many hoops and gave us so many different stories such as they don’t offer help when you are down and out and then have someone “special” call you and offer alternatives. Now we are back on track and all employed and stable and healthy (crossing my fingers).

  • Reply Sheri |

    Another plug of CitiCard; I just called and had my interest rate reduced and upgraded my card to a cash rebate.

  • Reply David Jolsyn |

    Interesting…  Since I’m one of those singularly rare people—someone in his late twenties with absolutely no credit history—this is very good, very useful information.  I shall diseminate as widely as possible.

  • Reply Mark |

    I wish I had a better experience with citicard. To late for me now. After some terrible years of dealing with medical bills my wife and I had debt up to our eyeballs. With the rampant universal default our debt just became more than we could handle, and believe me some of these credit card companys WILL NOT work with you. To make a long story short, now I’ve got a $8000 lien on my home from citibank. They must pay of judges to get these things.

  • Reply Nanci |

    I am with Mark. After being with citicard for about 8 years, always paying on time and always more than the minimun due, I had found myself unemployed,my mother was diagnosed with cancer (she died 6 months later)AFTER almost losing her one year earlier to heart disease. My life was in termoil, I was living off of other credit cards STILL ALWAYS PAYING CITIBANK. After skipping about 3 payments they CLOSED MY ACCOUNT,then froze it for one year allowing me to get below creditlimit
    with the promise that the account would then go BACK to the way it was before leading me to believe that meant OPEN..what it meant was CLOSED, Like it was BEFORE THE FREEZE PERIOD. Even after paying EACH AND EVERY MONTH SINCE, my rate is 31% and they will not reduce it… They have been killing me for three years. THEY STINK!!!!! Im FINALLY going to pay them OFF and they can go……..

  • Reply Maureen |

    I agree with you about Citigroup, that they’re the easiest to deal with. I had a card with them for 20 years, and never had the same nightmares with them that I had with Bank of America (AVOID!!!!) or some of the others. I can’t recall anything in 20 years that was bad.

    I have heard – I don’t have one of their cards – that Capitol One is horrific. Avoid them too.

  • Reply jp |

    Made a call re: Citi’s payment partner plan. You have to be solicited by the credit card company in order to receive it. Soungds like a great plan. Asked about the critieria, the rep have no info. Good Luck.

  • Reply jp |

    Made a call re: Citi’s payment partner plan. You have to be solicited by the credit card company in order to receive it. Sounds like a great plan. Asked about the critieria, the rep have no info. Good Luck.

  • Reply Brian |

    You say goodbye but they say hello!
    universal default now means UNIVERSAL NOFAULT!

    On May 22 2009, President Barack Obama signed the Credit Card Accountability, Responsibility and Disclosure! to go into effect in February 2010.

    What the President did was to provoke a vicious beast during its meal time.
    Did it ever occur to anyone that “The Beast” had the prey in its teeth when the prodding began? What did the White House news release say, 44 percent of families carry a balance on their credit cards!

    Now what?

  • Reply Leslie |

    I have frankly had a hard time dealing with the lying cheats at Citibank. After paying in time for over 30 years they give me a choice, raise the interest rates thru the roof or opt out with current terms. They have made a fortune off of me over the years and when I spoke to them said, so sad too bad goodbye? They would not negotiate the debt in any way and even when I spent a year out of work and made every payment told me that they could not help me. After opting out at current terms and having to find another credit card, they changed my rate up any way. I have spent over 10 hours on the phone with them trying to get it fixed and they have lost the notes, can’t find the terms and frankly have told every lie imaginable. They promise to get back to me and never do. I am glad to be done with them and will hire some one to settle my debt with them and pay them back in the same way they have treated me thus far.

So, what do you think ?