If you are one of those Citibank customers who have recently seen their interest rates hiked by as much as 30%, you may still have a chance to “Earn Interest Back,” as Citi’s program is aptly called. As with all offers that sound too good to be true though, there’s a catch: you will have to drastically increase your spending.


Qualifying for the Rebate

It isn’t simply a matter of making your grocery list longer by a few more items. Here’s a portion of Citi’s letter to one cardholder: “Charge $1,000 or more in purchases and you’ll receive a credit on your billing statement equal to 10 percent of your total interest charge on your purchase balance.”

For this particular customer, the minimum spending requirement is $1,000, others have it lower at $750, but some consumers need to up their spending by $1,500. Citibank said that the interest rate hikes and minimum purchase limits set for cardholders are based on their credit history.

Consumers struggling to pay off credit card debt may eventually realize that meeting the required spending limits could be the proverbial nail in the coffin that would bury them further in debt. And keep in mind that cardholders should also be able to pay the bill on time or else the rebate will be forfeited.

Citi Credit Card

They’re not exactly grinning, but for some Citi credit cardholders, the decision is a no-brainer: live with the new interest rate and just try to pay it off as quickly as possible. One customer who’s been left with these two tough choices – meet the minimum purchase amount required, or pay more interest — says that “spending that much would be irresponsible.”

And when you break it down to the numbers, is it really worth it? The rebates vary from client to client, again depending on the customer’s history. According to Citi, “Customers who do more business with us will have the most opportunity to reduce their rates.”  But for many, going outside of what they know to be a responsible level of credit card debt might just not be an option.

Without going to specifics, Citibank also revealed that around half of its cardholders will have the chance to earn back 50% to 100% of the additional interest charged them through this rebate program. Furthermore, rebates credited will be based on finance charges for the total outstanding balance and not just the monthly interest charged for the month.

Banks Act Ahead of CARD Implementation

Citibank is one of the many major credit card issuers that have implemented fees and charges only a few months before the sweeping reforms contained in the Credit CARD Act of 2009 go into full implementation come February 2010. Last month, Bank of America announced that it would be testing the charging of annual fees ranging from $29 to $99 on a number of accounts starting next year.

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