Citibank backs off on Ready Credit

Citibank has yielded to pressure from customers and regulators over unilateral changes to fees and terms applicable to its Ready Credit consumer loan. Last year Citibank promoted Ready Credit as a consumer credit product with a six-month introductory interest rate, and no application, monthly or transaction fees. In October 2005 Citibank informed customers that the standard rate for Ready Credit was cut to 12.99 per cent while on 30 November a credit facility fee of $160 would be imposed. The bank said at the time the fee would be waived if $1,000 were spent between then and Christmas, plus there is $20 cash back for every $500 spent by the year-end. ASIC said yesterday that Citibank agreed to allow affected customers until 30 June 2006 to avoid the “failure to spend” fee or close their accounts.