As Citigroup prepares to take another huge hit due to subprime regular customers ask one question with a dose of reality. Will Citi raise credit card rates and other fees to make up for dismal earnings and huge losses? How vulnerable are exisitng customers? These are questions that were never asked in the past. Why bother? But other banks, such as HSBC, make some Citibank cardholders nervous. One HSBC customer who was never late and not overlimit saw his rate raised to 31 percent. When he asked why he was told it was a “business decision”, with no details provided. (see it)
Some say Citigroup is more trustworthy than HSBC Finance (formerly predatory lender Household International) while others still believe liquidity must come from somewhere to pacify new investors. The New York-based bank said it raised $12.5 billion in capital from outside investors both domestically and abroad. Two months ago, Citigroup sold a stake to the Abu Dhabi state investment fund in exchange for a $7.5 billion cash infusion.
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