“Our records indicate your interest rate increased due to a change in your account terms. You were sent notification of the change in terms in November,2008. If you do not wish to accept the new terms, please reply to this message.”

Then last week, just to see what would happen, I applied for a Citi Card that they advertised with a 6.74 rate – I got it.

These people have no shame!

I have applied for and been given a 7.49% APR Platinum MasterCard which I will transfer my balance to. I will not close my cards out, that would be bad credit card mojo. I will however take them down to a $0.01 balance so that it takes just about a year for them to accrue any interest on it. They can take the interest rate that they doubled on me, from 7.49% to 14.99% and see how much money it makes them with an absolute minimum balance.

I might be able to reconcile myself to small increases over time if I knew that when the current crisis died down that reason and lower rates would prevail. I have a hard time however, knowing that loyalty is being turned against me to help rescue what turns out to be a blood sucking credit card company from ruin. Not only I am I to be gouged by a doubling in interest, but by being beaten mercilessly with taxes that will be used to rescue said credit vampire from a mess created by mismanagement that their other home finance arm helped create. Did I ask them to make the bright decision to irresponsibly push trash loans for more property than people could afford at interest rates with a surprise ending? I think not.

Don’t forget, not all credit companies are experiencing the kind of self-created nightmare that Citi is. As a consumer, it is your right to shop around. The promises that were made earlier about leaving things status quo, were only meant to avert a wholesale panic, not to give you any real assurance of the stability of your credit status. Those promises were intended to salvage some greedy executives’ need to obtain the little bit of your money that is not already his.

Some interesting advice from the American Chronicle

http://www.americanchronicle.com/articles/view/17619

Here’s the reason for my post though…. Friend with Citi also opted out – currently has a 1,500 balance, just received a call from their customer service saying that because he opted out, they were reducing his credit limit to $250.00!!!! AND that he is now over his credit limit, but as a “courtesy”, if he will pay off his balance NOW, they won’t charge him the over-limit charges…. Looks like they are REALLY looking for anyway to increase their cash flow. He paid the balance off & closed the account, BTW.

Here’s a thought.. CrediCard companies donate large sums to elected officials campaigns.. then are tipped off about pending legislation that would prohibit them from conducting “Rate Jacking” activities.. so they go ahead and hit us all with a Rate Jacking increase, while simultaneously stalling efforts to get the bill signed. Once signed into law,..the free for all party on the consumer gets much more difficult to pull off.. all the while,….. we the taxpayers are duped into bailing them out…. I gotta say that the timing of all of this…… Rate Jacking, Billion Dollar Bailouts, and no preconditions on how our tax payer dollars get spent by the recipients of our generosity, and pending legislation now stalled in committee smacks of rampant gamesmanship. If it looks like BS, smells like BS, then it most likely is BS…

I left the USA August 1st.. my Rate was 9%… and I came back on November 1st… and my rate went from 9% to now 18% it has doubled… since I left… and I always paid my bill… and been with the bank now for over 11 years… I just found out yesterday… what my rate was.. because I was opening my old mail.. and never really looked at my rate, figuring it was the same… and I pay all my bills online… so now I just found out.. How crooked is that!!!

I have two cards with Citibank; one for nine years, and one for four. About three weeks ago, like many Citi customers, I received the “infamous” notice letters for both of my accounts. The rate on one going from 6.99 to 14.99, and on the other going from 8.99 to 16.99.

I carry a substantial balance on one of the cards and zero balance on the other. I’ve always paid on time, always more than the minimum due, and have a credit score 730+. I could not afford to simply opt out and have the account closed when my card expires, because this would lower my utilization ratio and severely damage my credit score, so I finally called Citi’s customer service today.

To my surprise, not only was I able to keep my existing rates, but the customer service rep was able to lower the rate on my second card from 8.99 to 7.99. This was great news for me of course because quite honestly this whole thing had me really stressed out. They did however, switch one of the cards to a “new credit line”, which meant that I lost all the Thank You Points network awards, oh well …

I was very firm with the customer servise rep, I told them that I was a long time customer, always paid on time, good credit score, so this notice did not make sense to me. I got the general speech about how the economy is doing and this is affecting their busines, etc. The rep happened to be nice though and listened and looked for solutions right away.

My advice to others out there who cannot afford to close their account, fight for your right. Pick up the phone and call them. Be polite, but firm. They have a good customer service so hopefully you can work something out too.

I am not sympathizing with Citi here, not at all. I still believe that what they did is wrong and unfair to the customer. Don’t opt out, instead confront and fight for your right!

While it is true that bailout funds are going to citigroup, and from what we are told the money is going to the “mortgage” side of the busienss.. This corpoarte line is exactly what Citi is instructing it’s employees to put forward. Citicards..is if i’m not mistaken a subsidiary or perhaps a division within citigroup, so the money that “we” the taxpayers have “graciously” provided to the firm will…….most certainly or perhaps indirectly,.. find it’s way into all areas of Citi’s business since they as a firm had to go the government “which is BTW just happens to be “we the people” for a friggin bailout. This bailout is designed to keep the whole thing liquid, and since they have decided to go after the individual customers to increase revenue across the board, this is a likely strategy from the highest levels of Citi senior management to double dip on the taxpayers et al the “Customers”… and to justify this because “everyone else is doing it” …………………………..is ridiculous.

Yes credit is a busienss… and unfortunately it’s a business without a soul or conscience that seeks financial gain anywhere it can. Might I also add that credit card companies have also been linked to predatory lending practices, and it is those lending practices that have brought this firm to the point where the CEO has to beg washington for a handout. So where is the justice for the average joe trying to make a living, using credit wisely.. and just trying to get by in troubled times like these.

Oh yes, and the comment about “if you don’t like it” take your busiensss elsewhere. is the most arrogant and insensitive thing i’ve read in quite awhile.. i’m sure the Customer Service supervisors would love to know that their employees are pretty much teling their customers to leave. It is pretty clear from the general feeling I get reading these posts, most of Citicard’s really good customers, the same customers they should be courting and want to keep, will be doing just that, which leaves Citi with less than desireable customers, a higher risk for default, and in a much worse position.. Who ever the genious was who thought up the scheme to raise interest rates across the board should be fired on the spot… Perhaps Vikram should tune into this blog… he might learn a little about what his company’s decisions will eventually cost…

And just to be clear about bailouts, in addition to the 45 Billion being provided to Citigroup for their “Mortage” business………. Sec of the Treasury Paulson recently indicated that the government will pump billions more into the “Credit Card Industry”…. to help lenders free up credit so that average joes will be inclined to use their charge cards, to help get us out of this mess…. unfortunately for the average joe.. using the card will now cost him or her 50 – 80% more than it did last year.. which doesn’t make much sense if you want people to use the card…interesting concept… since it doesn’t make me want to spend more.

So….Perhaps those who work for Citi might educate themselves a little more with regard to how much money is actually flowing into the firm and their industry because the way I see it… jacking up our rates is just a really bad way of doing business.. especially when money seems to be pouring in from all directions cause Citi is just to “importnat to fail?”..well…. I say.. we the consumers are also to important to fail”.. cause without us.. the whole thing comes to a grinding halt….

As for 1, well that’s Citi’s problem. My opinion may influence whether or not I buy or sell Citi shares, but otherwise I’m not going to worry about whether this is a good business decision. It’s not MY business, after all.

2 is the more heated question. I ultimately think it is perfectly fair. Let’s say my interest rate (APR) goes up from 7.99% to 14.99%. All of my PAST borrowing has been billed at 7.99%, which is fair enough so long as that’s what both sides agreed to. Being told that if I continue to use Citi’s money in the future I’ll be billed at 14.99% is also fair enough. I’m certainly under no obligation to use Citi’s money if I don’t like the interest rate. Using my own money instead of Citi’s money may, in this case, turn out to be the more advantageous option for me.

The only way it would be unfair would be if Citi made the change retroactively, so that after agreeing to pay 7.99% you were suddenly told, today, that in fact your rate went up on October 1st (for example) and so now your interest over the past 2 months is higher than you were led to believe. Or if Citi said it’s going up TODAY, so you don’t have a couple of weeks to make other arrangements.

I’m beginning with the assumption– which I realize not everyone may share– that regardless of when I originally borrowed the money, each and every day that I don’t pay it off is the equivalent of another active decision to borrow that same money again. So if, taking into account all rates and fees, it made sense for me to be in debt to Citi for the past 18 months but it doesn’t make sense for me to be in debt to Citi for the next 18 months, then I’ll change the situation.

And do keep in mind another option if you have credit card debt: who says you have to use the same account for spending needs that you use for storing your debt? It’s still extremely easy to get a 0% card for a 15 month period with the transaction fee capped at $75 or so. I did it just last week– $75 for access to an extra $10k for the year, which is now sitting in my Treasury Direct account ($5k) and my wife’s ($5k). This is paying over 5.6% currently, which means my $75 of expense will be converted into over $560 in earnings, for a profit of nearly $500. (That’s an estimate, of course, because I don’t know what will happen to the I-bond rate after May 1st).

But however one uses that money, for a 10,000 debt, that fee is the equivalent of well under 1% APR– inclusive.

Just call the 1-866-565-7030 number to opt-out of this. Your account will cancel automatically at the end of the current calendar year or your card expiration date. You will continue to pay your current rate (in my case 6.74% / as long as I don’t make a late payment) until it’s paid off.

BTW, I find this amusing or interesting at least. I have my mortgage @ 5% through CitiMortgage. I had a 5 year adjustable rate mortgage that will renew in Jan.09 I was so scared to see what it was going to readjust to. They raised me to 5.125% My payment is going up $2.07 a month. WOW

Hey, it’s just business.. :) Good luck everybody

I received a similar letter from Citibank today, raising my rate from 6.75 to 15%. I’ve been paying them interest for a while on this card I use for a home business. I’m also a long-term customer with no history of repayment problems. The letter offered no explanation for their rate increase, but I do read the news.

The minute I was alienated by Citibank, I called USAA and requested a MasterCard. They were happy to issue me a card at their lowest rate of 6.25%. It looks like they want my business, as they realize that an excellent credit risk such as myself will make them some low-risk money. Citibank will get a bunch of cash from me to transfer the debt to USAA, then nothing more.

I’m baffled that Citibank decided to blow off their low-risk customers who provide them with income, while they are more likely to keep the customers who will default on their debt since those are less likely to be able to transfer their debt to another bank. This sounds like one of those all-too-common decisions by American “financial mavens” to get this quarter’s numbers up at the expense of destroying the business in a year or two.