March 2, 2007 New York-based Citigroup is ending “universal default” on all Citi-branded consumer credit cards, effective immediately, the company said. Universal default, a common practice among credit card issuers, is when the company increases a consumers' interest rate when that consumer is late paying other creditors' bills.

Citigroup also announced it would eliminate its “anytime for any reason” rate increases, which allow the company to raise interest rates and change terms at any time and for any reason, another common practice among card issuers. Citigroup said the policy is effective immediately for new customers and will go into effect for current customers by April.

Citigroup said the changes were part of its ongoing efforts to “put our customers first.”

Thanks to the changes, interest rates and fees will increase only if the customer pays Citigroup late, exceeds the credit limit or pays with a check that bounces.

If the card's interest rate is tied to the prime rate, the rate will change to parallel changes in the prime rate. Also, under the new policy, the card's terms may change when the card expires, generally after two years.

Chase recently announced they would no longer engage in the practice of double-cycle billing, where a company applies interest charges on a two-month period rather than a one-month period. Under that practice, interest can be charged on paid-off balances.