Do You Have a Citigroup Credit Card?

If you do (or did in the last 6 or 7 years), yours may be one of the 1.75 million credit card accounts that was mistakenly overcharged and is due to receive a refund. Citigroup recently revealed in an annual filing that they discovered an error in how they were calculating interest rates. After a systematic review to find and correct the mistake, they’ll be automatically issuing refunds to affected accounts. The average refund will be about $190; which includes interest on the amount overcharged.

There’s nothing you need to do if you think this may apply to you, Citigroup is notifying cardholders and issuing refunds automatically.

There’s a lesson for everyone here. The underlying cause of the overcharging is that credit card issuers can, and probably will, increase your interest rate if you are late on two consecutive card payments. (They’re supposed reduce the rate again once you make your minimum payment on time for 6 months – this is where Citigroup made their mistake and didn’t provide the reduction to everyone eligible for it). This is yet another reason to make sure you make AT LEAST the minimum payments on credit cards on time. Not only do late payments impact your credit score, they cost you more in interest over time since your rate will likely go up. Automate minimum payments if you can, if not, set a reminder on your calendar a few days before the due date to avoid mistakes.

source: CNN Money