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Published on: 8/14/2007
Last Visited: 8/14/2007
Credit cards tailored to myriad consumer demands in the past 25 years require a corresponding refinement by credit card banks in disclosing fees and interest - the cost of that credit - said Vikram Atal, Chairman and chief executive officer of Citibank's Citi Cards.
Citi's credit card operations - among the largest in the country - are based in Sioux Falls.
Atal made a similar assertion to the U.S. Senate Permanent Subcommittee on Investigations in March.Atal told the committee that Citibank unilaterally stopped charging clients higher interest if they fall behind with creditors other than Citibank, a practice known as universal default.
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Atal said Citi does not increase fees beyond the level charged when a card is issued, unless card holders pay late, exceed credit limits or pay with a check that bounces.
His company also has created a series of alerts to customers when payments are due or when credit limits might be exceeded, and it waived a fee for new customers making an initial payment by phone.
When the Government Accountability Office in 2006 issued a report on credit card interest and fees and recommended fuller disclosure of these, "every single disclosure cited as a best practice was a Citi disclosure," Atal added."That's not to say we couldn't improve further.But we are pleased with the work we've done."
Until the 1980s, Citibank offered about a half-dozen types of credit cards.Today it offers between 250 and 300, Atal said."It is important our customers understand the nuances in the different products.
"The explosion in product development was driven by customer demands and needs over time.Some wanted low rates, a points program, cash back.We try to meet their needs, and that creates its own complexities," Atal said.
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Citi currently is among credit card companies working with the Federal Reserve on improving disclosure procedures, Atal said.
Atal acknowledged that congressional review of the credit card industry "is an issue that has created a lot of energy" among industry leaders.
As Congress sharpens its focus on the industry, "we are hopeful that folks will see the business is, for the most part, well managed. ...The credit card banks do take consumer interest very much to heart."
Atal also reaffirms Citibank's commitment to Sioux Falls, where its credit card business has been centered for the past 26 years.
"Sioux Falls has been our franchise site.
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