Citi increases interest rates across credit cards

Posted: 29 August 2019 1:45 pm
News

Young girl checking credit card details at laptop.

Citi credit card customers will pay higher interest rates on purchases and cash advance transactions come October.

Citi is lifting the interest rates across almost all of its credit card products from 1 October 2019. These new interest rates will apply to both purchases and cash advances. The bank will be contacting existing customers with further information on the changes over the coming weeks.

Interest rates on purchases will almost unanimously increase to 21.49% p.a. across the board. The Clear Platinum (which is the bank's low rate product) is the only card that is maintaining its purchase rate. Meanwhile, cash advances will attract an interest rate of 22.24% p.a. for the entire suite of Citi credit card products. Although these interest rates will apply to most cards from the beginning of October, the interest rates will change for the Citi Simplicity card from 1 November 2019.

You can compare Citi's new credit card interest rates with the current rates in the tables below. To make it easier to see what's changing, we've broken down the comparison by purchases and cash advances.

Changes to purchase interest rates

Citi credit card Current interest rate New interest rate
Clear Platinum 12.99% p.a. No change
Simplicity 19.99% p.a. 21.49% p.a.
Rewards Classic 20.99% p.a. 21.49% p.a.
Rewards Platinum 20.99% p.a. 21.49% p.a.
Rewards Signature 20.99% p.a. 21.49% p.a.
Signature Qantas 20.99% p.a. 21.49% p.a.
Prestige 20.99% p.a. 21.49% p.a.
Emirates Citi World Mastercard 20.99% p.a. 21.49% p.a.
Prestige Qantas 20.99% p.a. 21.49% p.a.

These interest rates apply to any remaining balances from purchases at the end of the statement period. If you pay your Citi card balance in full by the statement due date, you won't be charged this interest rate and can usually access up to 44 or 55 interest-free days on purchases.

Changes to cash advance interest rates

Citi credit card Current interest rate New interest rate
Clear Platinum 21.74% p.a. 22.24% p.a.
Simplicity 19.99% p.a. 22.24% p.a.
Rewards Classic 21.74% p.a. 22.24% p.a.
Rewards Platinum 21.74% p.a. 22.24% p.a.
Rewards Signature 21.74% p.a. 22.24% p.a.
Signature Qantas 21.74% p.a. 22.24% p.a.
Prestige 21.74% p.a. 22.24% p.a.
Emirates Citi World Mastercard 21.74% p.a. 22.24% p.a.
Prestige Qantas 21.74% p.a. 22.24% p.a.

Cash advance interest rates apply to transactions like ATM withdrawals. If you have a balance transfer on a Citi credit card, the cash advance rate also applies to any remaining balance transfer amount after the introductory period ends. Unlike purchases, cash advances attract interest from the moment you make the transaction. With this in mind, you'll likely want to use your debit card to withdraw cash instead.

Why has Citi lifted its credit card interest rates?

"There are many factors taken into account when deciding the interest rate on a credit card," a Citi spokesperson told Finder. "These include profitability, the cost to service the product and interest rates will vary pending the features on the card."

As well as low rate options, Citi has also highlighted the availability of instalment plans for customers looking for a lower rate.

"We have also introduced new ways for customers to manage their payments, including instalment loans, which allow customers to convert their retail purchase balance to a fixed-rate instalment plan at a transparent and lower rate," said the spokesperson. The bank also recently partnered with online retailer Kogan.com to offer buy now pay later instalment plan options for Citi customers.

If you want to reduce your credit card interest costs, you can start comparing cards with low interest rates that can vary between 11.99% p.a. and 13.99% p.a. If you want to avoid interest altogether, you could consider a card that charges 0% on purchases for a promotional period of up to 14 months.

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