Apparently credit card companies are trying to get around the new rules about jacking up your interest rates by replacing your current credit card, that’s covered by the new rules against rate jacking, with a rebate car, that’s not.

From the Wall Street Journal:

Citibank rolled out rebate-card offers to some of its customers last fall, offering to refund up to 70% of finance charges when customers pay on time. The problem: Rebate offers aren’t governed by the Card Act, and an issuer can revoke them suddenly and hit cardholders with high charges.

The net result is the same as raising rates—and because it is perfectly legal, customers have little recourse. “Rebates on finance payments may seem like a good deal, but you could end up with a very high interest rate suddenly,” says Mr. Frank, of the Center for Responsible Lending.

“The rebate offer is clear, transparent, and we believe fully within the spirit of the Card Act,” says Citigroup spokesman Samuel Wang. – Source

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