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Citigroup Gets Creative to Boost Cards

"Nearly all of our customers now have the opportunity to earn back a portion of the increase each month," Citigroup said in a statement. "Eligible customers who do more business with us will have the most opportunity to reduce their rates."

Nearly half of Citigroup's customers will be eligble to earn back between 50% and 100% of the interest rate increases, the company says.

Citigroup is also offering balance transfer options to certain card users receiving higher rates. If a customer moves a balance from another card issuer onto their Citi card, the company will apply the lower balance transfer rate to the existing balance on the card.

"We want to reward customers for doing more business with us," a company spokesman says.

In addition, customers can "opt out" of the changes and choose to shut down the card, but still make purchases on the card until its expiration date, the company says.

Finding ways to get customers to put more on their credit cards is a sentiment echoing throughout the card industry. Consumers have slowed their spending on credit because of the economy, and are increasingly using their debit cards.

Card issuers are also looking to alter their card business models as large regulatory reforms will change how issuers make money -- essentially the elimination of risk-based pricing -- and give more transparency among fee changes are set to begin in February from the passing of the Credit Card Accountability Responsibility and Disclosure (Credit CARD) Act in May.

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