A deal is a deal, right?
Squeezed financially, Citigroup reneges on a credit-card promotion
"A deal is a deal." That's the promise made to credit-card customers by Citigroup, the Wall Street financial conglomerate that even used the phrase last year as an advertising slogan to promote a new consumer-friendly credit card policy. Citigroup said that if people took its card, the terms of the agreement would not change for two years.
Believe it or not, this minimal concession to commercial integrity was considered a big deal, because banks are notorious for jacking up customers' credit-card rates whenever they feel like it. Citigroup was pledging to forego the "anytime, for any reason" clause that banks write into their fine-print agreements. It also abandoned the "universal default" clause that lenders commonly use to raise your credit-card rates if you're late paying a bill — any bill, even one not charged to your card.
This powerhouse bank wasn't acting out of the goodness of its corporate heart; instead, it was responding to consumer outrage that had reached all the way to Congress, where lawmakers were considering new regulations to stop these rip-off practices. Spouting its "a deal is a deal" plan in a congressional hearing last year, Citigroup executives deflected the stricter regulations.
But that was then. Now that Congress has gone away, and now that Citigroup finds itself in a financial crunch resulting from bad executive decisions, the bank says that it didn't literally mean that a deal is a deal. It was an advertising slogan, not a blood oath — so Citigroup is reneging.
To add insult to injury, Citigroup blames consumers for its abandonment of the "deal." It was expecting that a flood of people would switch to its card — but, apparently, consumers are not as gullible as Congress is about promises from Wall Street bankers.
Jim Hightower is a national radio commentator, columnist, and author.