Citigroup raises rates on 15M credit cards

NEW YORK, July 1 (UPI) -- Millions of U.S. consumers using Citigroup credit cards have had their interest rates hiked ahead of coming limits on such increases, Financial Times reports.

The business newspaper said Wednesday sources close to the situation said Citigroup raised interest rates on 13 million to 15 million credit cards it co-brands with retailers.

Analysts at Credit Suisse say their review of data from Lightspeed Research revealed consumers who don't pay off their balance in full each month saw their rates rise by an average 24 percent -- nearly 3 percentage points -- between January and April.

The increases come as the U.S. government is about to assume a one-third stake in Citigroup as part of its latest rescue and ahead of the creation of a new federal agency charged with protecting consumers on credit card and other financial matters such as mortgages, Financial Times said.

Financial Times said Citigroup had no comment on the matter but that people close to the bank said the figures followed internal data.

U.S. Rep. Carolyn Maloney, D-N.Y., who has pushed for consumer protection legislation, questioned Citigroup's timing.

"It's hard to tell if rate hikes on existing balances being put in place now are the result of prior bad business decisions or getting in under the wire of the new law," Maloney told Financial Times.