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Citigroup Inc. and American Express Co. have begun notifying credit cardholders of increases in annual interest rates in response to economic conditions. Effective with billing periods beginning Dec. 1, AmEx will increase interest rates on some of its cards by two to three percentage points and will raise the conversion rate for charges made in foreign currencies, an AmEx spokesperson tells CardLine. Citi also will reprice interest rates for "a group of cardholders," according to a spokesperson, declining to specify by how much or which customers would be affected. One observer who requested anonymity says Citi is raising some cardholders' annual interest rates by as much as 7%. Citi customers whose interest rates are rising "have not been repriced in at least two and, in many cases, three years," the spokesperson says, noting those customers may opt out of the new rate and continue under existing rates until their cards expire. The Citi spokesperson said interest-rate increases will vary depending on a customers' existing rate, but he would not disclose specific interest-rate changes. He confirmed that Citi continues to cut staff as part of its goal of reducing its head-count by 22,000 over several quarters. Through the end of the third quarter, Citi eliminated 12,900 positions and another 9,100 will be eliminated over the next year. The spokesperson declined to comment on how its U.S. card unit will be affected by the job cuts.
