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Citigroup Credit Card Rates Going Up: A Mystery

This article was written by in Credit. 67 comments.


Every Tuesday, Smithee presents an article about his own experiences with and observations about credit cards.

Do you have a credit account with Citigroup? I probably do. I think I started one with Rooms To Go when we started paying for our very comfortable bed. They said it would be interest free for however-many months. I figured out how much we’d have to pay per month to make sure we’d never see any interest accrue, but nothing’s set in stone.

For example, despite a pledge made to Congress in 2007, Citigroup is raising its credit card interest rates for many if not all of its customers by 2 or 3 percent. Citigroup has pointed to the “difficult market environment” as the cause for this euphemistically-phrased “repricing.”

Here’s the weird part: in the last four weeks, the average credit card rate has decreased, which doesn’t point to a system-wide difficult environment. Also, since nobody really knows what’s going with the $700B bailout/rescue plan, there’s a fairly good chance that some large part of our taxpayer money might go to rescuing credit card companies.

I’m not much of a conspiracy theorist, but with all of this news appearing in the same seven-day period, it seems to me like the people making decisions aren’t talking to each other very well. That, or Citigroup is taking advantage of otherwise innocent Americans. Oh, there are those contracts we agree to, of course. But in this instance, Citigroup made a pledge to Congress. That should be worth something, don’t you think?

Updated February 10, 2011 and originally published November 18, 2008. If you enjoyed this article, subscribe to the RSS feed or receive daily emails. Follow @ConsumerismComm on Twitter and visit our Facebook page for more updates.

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About the author

Smithee formerly lived primarily on credit cards and the good will of his friends. He is a newbie to personal finance but quickly learning from his past mistakes. You can follow him on Twitter, where his user name is @SmitheeConsumer. View all articles by .

{ 67 comments… read them below or add one }

avatar Leigh

All of this “Bail out” money is going to companies to fix their bottom lines with no guarantee they will do anything for the consumer. If a Bail out is put in place for Credit Card companies, the money needs to be paid to consumers first. We can then pay down our credit card balances and help ourselves and the credit card companies. Of course the problem is that many wouldn’t use the money that way.

It makes me sick to see all of this money going to companies that then decide the money is best used to buy another bank or throw another lavish party. If instead of buying troubled mortgages, the government paid off or paid down mortgages, the benefit would be to the general public and the mortgage companies.

None of this money is making a difference because the companies haven’t changed their business practices, they are just using the money to continue their failed practices. Of course this is preaching to the choir… So I will stop now.

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avatar Barb

Interesting; I’ll have to take a closer look at my Citibank statement the next time it comes. Luckily that’s the card that I’ve paid off (and pay off in full each month); I’d be scrod if Chase did the same thing.

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avatar Mark

I don’t think this is much of a mystery. Citigroup is in deep trouble and they are trying to cut expenses where they can and raise revenues where they can. There’s no question that the people that keep a credit card balance may likely have a lower credit rating, making it less likely that they can even get a credit card from another institution. So they’re sort of in a bind, meaning that Citigroup will take advantage because it has to.

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avatar Oscar

Mine actually went down a full percentage point without my asking for it. This was after I had asked them to lower it about 4 months ago, which they lowered significantly at the time. I have been really working on improving my credit score and it appears to be paying off.

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avatar Brian

“That, or Citigroup is taking advantage of otherwise innocent Americans”

You think? While I don’t entirely agree with the use of innocent in this context, as people sign themselves up for this ride, I do agree in the sense that credit card companies do indeed renege on their word often and prey on their customers. If a restaurant or retailer treated you like this, would you go back? I highly doubt it, which makes America’s relationship with credit cards so confusing.

Perhaps the silver lining is that Citigroup is losing money because people are wising up to these ridiculous shenanigans… we can only hope.

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avatar Margo

I was attending a corporate event in Winston Salem NC today. We took a bus past Citi’s NC call center which has the very ironic “We’re Hiring” sign on the building…the banner has been up there for at least a year. I wonder if they will have to take it down?

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avatar Bob

This is simply one of the dozens of reasons to not use credit cards.

They make the rules, and you have to play by them. One of the rules is they can chage those rules whenever they want. Yet people still do business with them. Mindboggling.

Stop using credit cards completelty. Cut them up. Cancel the account.

Then this announcement won’t matter.

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avatar kitty

Like Mark, I don’t see the mystery either. Citygroup is in trouble, they have losses, so they need income. Citygroup bond yields is up with yields-to-maturity of over 9% — so if you want to risk lending your money to Citygroup, you can buy bonds with this much yield. I am actually considering it.
Also, in current economy, the risk of credit card defaults is high. Higher risk = higher rates. This is basic business.

“t some large part of our taxpayer money might go to rescuing credit card companies.”
hat exactly do you mean by “credit card companies”? All banks are involved in credit card business, and many banks can get taxpayer money. As to credit card companies specifically – Discover, AmEx, Visa and Master Card – then only first two of them are directly involved in lending: Discover and AmEx. As far as I know Discover hasn’t asked for government money yet, but since it is a bank it may in future. AmEx just became a bank holding company, and asked for money.

As to Visa and Master card – they are NOT involved in lending. AT ALL. They don’t set interest rates – banks that issue these cards do, they don’t profit from fees or interest, they don’t suffer losses in customer defaults.Visa and Master Card get their profit only from merchants – 2 or 3% on each purchase. This is their business model. Moreover, they get their profit regardless of if you use Visa or MC branded credit card or debit card (used as credit). As long as you pressed “credit” when you made a purchase, the merchant will pay to Visa or Master Card. Since these companies aren’t banks they aren’t eligible for government bailout; since they do not suffer losses in credit card defaults, they don’t need to ask for money. Sure if people buy less, they make less money, but these companies don’t lose money.

For some reason posters and blogger here seem to make a distinction between credit card companies and banks. They blame “credit card companies” for lending policies even if half of these companies have nothing to do with these policies. Yet, the banks that you do business with every day are responsible for these policies you don’t like. When you deposit your money in a bank, the bank will use this money for lending, including for credit card lending. So indirectly, by earning interest, you are also profiting from credit cards.

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avatar Crystal Wyatt

I do not know how you can state what I just read. The interest rate is at the lowest since twenty years ago. Yet today I get a letter stating my 10% Citicard interest rate will increase to 29.99% by August 04, 2009 if I do not opt out. Maybe you have more money than you know what to do with or invest, but as a school teacher I pay my bills on time especially my citicard. I double and sometimes triple the payment. In life there are times when there are emergencies, but to increase from 10 to 30% is not the way to do business. I will opt out and hopefully I will live long enough to see”citi-group go completely under. No more bail outs!!!

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avatar kitty

“Stop using credit cards completelty. Cut them up. Cancel the account.

Then this announcement won’t matter.”

If you pay your bill in full every month then this announcement wouldn’t matter either. I couldn’t care less if they raise my rates – AmEx just did. So? I don’t plan on paying these interest – never have never will. But I find credit cards very convenient, so I have no reason not to continue. As to “reneging on their word” – they told that the interest rates can go up at any time, and the credit card users agreed to these terms. You don’t like higher interest rates – cancel your card.

Also, I would like to ask the posters here a question, at least to those that have money. Under which conditions would you be willing to lend to a) people you don’t know b) without a collateral c) interest-free for at least a month, so those who live within their means will repay the loan without any profit for you and those who don’t return the money within this period are obviously irresponsible and hence present higher risk. Think how high the reward needs to be for you to justify this risk. Think if you’d like an option to raise rates if a) you find out that the person is poorer risk than you’ve thought and b) you start experiencing a lot of defaults and losing money.

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avatar Brian

Kitty-

My statement on reneging on their word concerned Citigroup’s Congressional pledge of “A Deal is a Deal”, which included not invoking universal default and only raising interest rates biannually (when cards come up for renewal). Pretty clear-cut case of reneging. And to answer your quesiton, I personally would never lend money, as I strongly disagree with the practice. If I’m going to dole out some cash to someone, I’m not planning on getting it back. I do a lot of giving, but am selective when and where I do it.

I did not find credit cards convenient – in fact, they were a huge hassle to me since I prefer to pay for it and be done. I find it to be much more convenient to actually pay for something at the time you buy it rather than add an extra step by involving a company chomping at the bit for you to make a mistake so that they can take more of your money. No thanks. If you have the money, just pay for whatever it is… no need to fool around.

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avatar kitty

Brian-
I’ve not been aware of any credit-card related conditions to the bailout which is why I misunderstood you. I certainly heard about the credit-card related bill in congress. I also heard that consumer union wanted for it to be part of bailout, but that banks opposed it. What I haven’t heard about was that any provision of this bill has ever passed or that any credit-cards-related condition made it into a bailout. If you had seen it, could you please provide the link?

You say you strongly against all lending? Or just consumer? Are you against student loans, business loans or mortgages as well? Just curious.

“If you have the money, just pay for whatever it is… no need to fool around.”
This depends on your definition of “having money”. My net worth is around 970K (down from a little over 1M last year… ouch – lost over 100K this year), but 400K of that is my paid-off home, so it doesn’t count; and half of the rest is retirement , so I guess this doesn’t count either since I cannot touch this money yet. This doesn’t really leave that much available money, only about 280K, about 110K of which is in cash/CDs and the rest invested – mostly in stocks, a little bit in bonds. So, I am not sure if this counts as having money, but it’s still more than enough to pay off any credit card bill in full especially since I am not normally a huge spender. I don’t have any debt other than my last month’s credit card purchases (about 1K this month) which they will deduct on the 29th.

As to credit cards, I certainly respect someone’s decision not to use them for whatever reason. As with any tool some people find it useful, others hate it. I find them convenient because a) I don’t need to carry cash around b) in case of a fraud, the money aren’t deducted from my account immediately as with debit cards, but I have time to reject the charge c) I get cash back – not much money, but it’s free, and I like free money d) I have over a month float which allows a little extra interest and a little more flexibility. In some cases this extra month float makes a difference between completely cash-flowing an expense rather than transferring money from savings. e) credit cards are almost a requirement on international trips.

BTW – I had very little money when I got my first credit card a couple of months after I started working after grad school, and somehow I figured out that if I pay the bill in full I pay no interest and if I don’t, I’ll pay very high interest. Guess what – my then 40-something parents who could barely speak English at the time figured it out too. They also have never carried a balance. If some refugees from a communist country could manage to use credit cards without paying interest why do so many Americans feel they cannot do it without some kind of regulations to protect them?

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avatar Tyler

They say theyre raising APRS by 2~3%?! Just got my letter, Im going from 7.49 to 15%…thats a 7.49% jack. Good thing my account doesnt expire for 3 years…OPT OUT HERE I COME!

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avatar kitty

Brian, never mind I saw the link about 2007 pledge in exchange for some regulations being lifted. But Citygroup also promised to repay its own debt – the one it made when it issued bonds.

Yes reneging on one’s promise is bad. Bankruptcy is also reneging on one’s promises too as is defaulting on any of the debts. If Citygroup goes bankrupt it will have to renege on its promised to repay its own debt – so either way it will have to “renege”.

How many of City’s customers are reneging on their promises now to repay their debt? Because a lot of people are reneging on their promises to pay their debts, 53K of Cutygroup’s employees will be laid off soon. Not CEOs or greedy executives who made bad decision – regular people like you and me. Should City continue to hold the rates steady in the environment when it is losing money every quarter in defaults and maybe lay off any more people? How many people do you think will lose their job if Citygroup goes bankrupt?

This company is fighting for its survival. When one is fighting for survival, one sometimes reneges on one’s promises. Would you not steal food if your child was hungry?

It’s our money too. The government will probably not going to let Citygroup fail. So City will need more money. Would you rather people who overspend pay more in interest or would your rather this money come from your pocket in form of additional bailout money for the part of Citygroup’s losses that may be offset by this higher rates?

I suggest everyone who’s been on the moon lately and thinks of all the credit card “companies” (whatever it means since as I said neither Visa nor Master Card does any lending or has any financial problems) make huge profits checks out Citygroup stock on Yahoo finance and reads the latest news. Then maybe you’ll understand why City had to raise its rates. Yes V and MC make profits, but they aren’t doing any lending. AmEx, Discover and all the banks are losing money.

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avatar Tyler

Fine by me, they’ll simply have a ton of customers paying off their debt and leaving. Why would I keep a 15% APR CC? Makes no sense. Not sure how they selected people to raise rates but about 1.5 years ago I ran up my CC to about $4,500 and have consistantly paid it every month and now its at like $750. It’ll be paid off shortly and all the 15% APR will do is drive *me* away. Not sure how I qualified to have my rate doubled…Im an easy, safe source of income from them that theyre losing. Seems stupid in my opinion. Bye Citi! Ill spend my money elsewhere.

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avatar Anna

We have a CITI card at 5.99% and on the last statement it said it is going to 24.99%!!!!!!!! Opt out is right!
American Express is also lowering people’s credit limit to a few hundred over what you owe. I even read where one person paid hers off, went on vacation, and when she went to use it found out they had lowered her limit down to $500. This makes no sense to those of us who do pay our bills on time and have good credit scores. There have been times we had to use credit and now this.

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avatar harm

Go for the cash if you go for anything. Last year I was eligible for a couple of free tickets from a Chase/ Southwest Airline miles card, and just couldn’t use the miles, due to restrictions. I learned my lesson, SHOW ME THE MONEY, LoL.

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avatar kitty

Tyler, they probably raised rates for everyone. American Express raised my rate to 22%, and I’ve never paid a penny in interest in many years I had their card; I even have automatic payment of full balance set up i.e. they take whatever balance there is at the end of the month automatically from my checking, so they know there is no chance in hell, they’ll get interest from me.

What you guys don’t seem to understand is that in the current environment credit got more expensive. All credit, consumer, corporate, even municipal. Even McDonald has trouble getting loans. It’s not the issue of how good a customer you’ve been or how well you paid until now; it’s the issue of higher cost of credit for everyone. Bond market reflects it nicely – hey if you want to, you can lend your money to AmEx at over 9% rate.

If you don’t like it, you can vote with your feet – it’s your right. You may even find some 0% offers if your credit is good, I am surprised you haven’t taken advantage of it before. I am sure they expect some people to cancel – but these aren’t likely those who bring them more money anyway. How much money is Citi going to lose from your leaving. The interest on your $750 until you pay it off? This is pocket change to a bank. After that, presumably you are going to pay in full, right? This means they’ll be losing money on you. Remember merchant fees go to Visa and Master Card, your interest goes to a bank. If you pay no interest, bank is not making money. So why should they care if you are leaving?

Harm, this is why I don’t use cards that give miles, only those that give cash backs. Nope, I am not going to cash, I am doing quite fine with cards, thanks.

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avatar Steven

I just got a letter in the mail. I have perfect credit and for the last 4-5 have enjoyed a rate of about 7.99 percent. Now it’s going up to 14.99% (LIBOR+11.99%). Sad part is that because I was unemployed for 6.5 months I charged mostly everything to it…food and gas mostly. I hope this didn’t push me one step closer to BK.

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avatar rth

I hope everyone does what I am doing and make them pay for this. Look at all your Gas and Store brand cards, you may be surprised at how many are processed by Citi. I’m closing all of my accounts that are linked to Citi and letting them know my purchases in the future will be at their competitors that do not use Citi to process their cards. Phillips, Exxon Mobil, Lowes are all Citibank. BP and Home Depot are GE bank.

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avatar rth

Sorry got my statements mixed up. Lowes is GE bank, they get to keep my 2-3k a year home repair costs. (Crappy builder that went out of business during the mid 80′s housing downturn)

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avatar Will

What gets me here is the article states a “2% to 3%” increase in rates. I have a Citi PremierPass, which they just “upgraded” to World Elite level, with a 9.99% APR. Under the new terms it increases to 16.99%. I pay my acount balance in full every month and have done so for years and I have great credit. Why are they raising my rates this much? When I called in to ask why my rates are going up, I got a story about the economy is bad and this is how they are responding to it. What??

I opted out and I’m closing my other Citi (AAdvantage) card.

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avatar kitty

“When I called in to ask why my rates are going up, I got a story about the economy is bad and this is how they are responding to it. What??”

Go to http://www.cnbc.com. Read all the headlines on Citigroup. Then maybe you’ll get the idea why they are raising your rates. Citigroup’s stock is under $4, it is about to lay off 53K people, and everyone is wondering if they’ll be able to come up with a convincing message by Monday that they have enough capital.

Really, you must be on the moon not to know that all financial companies are struggling, especially Citi and that they need to increase they are profits. As they say – “it’s not personal, it’s just business”. You don’t like a business, you don’t have to use it.

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avatar Paul

Both of my CitiGroup Cards rates went down 1 point but now both with in this last week I have received letters telling me they are going to jack up my rate. Well HAHA Citi I’m shredding your companies cards right this moment. You raise your apr you lose me as a customer.

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avatar Paul

Citi looks like they are going to go under if they keep treating their customers like this garbage. On one side that would be horrible but on the other it would be great. The only thing is I bet a lot of folks can’t just pay off their cards because of too much credit debt. LET’S MAKE CITI GROUP PAY!!!!!!!

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avatar kitty

“On one side that would be horrible but on the other it would be great. The only thing is I bet a lot of folks can’t just pay off their cards because of too much credit debt. LET’S MAKE CITI GROUP PAY!!!!!!!”

Sure Paul, it’s great that hundreds of thousands of people who work for Citi will lose their jobs. They are already planning to lay off 53K people next year. If they go out of business, how many more will lose their jobs? How many of these people do you think were involved in the decision to raise your rates? Oh, and think what the effect this will have on our already bad economy?

A question to you and those screaming murder at the time when Citi stock is under $4, they had 5 quarters of net losses, their laying off 53000 people and every analyst on Wall Street screams how this is not enough. If you had a business that was barely surviving, the costs of doing your business like buying parts suddenly increased, you had to lay off a lot of people, what would you do? Would you try to increase your profits by raising prices on your products even if some years ago when the economy was great and cost of doing business much cheaper or would you go out of business – which means you will not be able to repay your own debts and most of your employees will be laid off? Yes, if you raise prices, you’ll lose some customers. But if you don’t do it, you’ll go out of business. Think what you’d do.

Loans is Citibank’s products. Interest they get is their profit. Losses they experience is the cost of doing business. Their cost of doing business went up significantly and unexpectedly. What would you do in their place? Try to raise profits or lay off a lot more people in addition to 53000 you already plan to lay off.

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avatar nathan aaron

Well, now that the government is bailing them out, you think we’ll get a new letter letting us know our rates won’t go up? (I bet not.) I’m not sure if when your apr goes up, so does your monthly amount due, but there is simply no way I can pay any additional monthly money to Citi. It’s seriously not possible on my budget/income. (And mine is also doubling from 7.49 to 14.99 APR)

If you opt out, you have until the end of your contract, or your expiration date on your card (which is 9/09 for me.) What happens after that? They close the account, and you continue paying, or they expect it all up front?

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avatar BaldyInDelaware

Saturday I received my “Change In Terms Notice” in the mail – what a joke. I’ve had the card since the 80’s, haven’t rotated a balance or paid interest on any credit cards in years. Why? Why? Why? Just in case I checked my FICO score – it’s in the 780’s.

It’s not even worth my time to call and ask why – all you have to do is read the headlines. I just feel bad for everyone who is having a hard time right now…this makes it even worse.

My words of wisdom – “Create a budget – stick to it and Live Within Your Means”

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avatar Paul

Um Kitty to me it seems like you are siding with Citi Group. I don’t mean to make this political but the democrats are the ones who wanted banks and places like Citi Group to approve people who would not normally be able to afford certain loans or lines of credit. Me for one I should not have been approved for some credit cards but I was intelligent about the way I used them a lot of people WERE NOT! So when push came to shove they could not make ends meet and defaulted on loans and credit. So now we lose their buying power and it’s a snowball effect. I still say screw Citi they can manage their costs better just like the Big 3 in detroit! Cut costs buy not giving their CEO’s that do jack shit millions of dollars and see where their budgets are then!

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avatar nocreditcardsforme

Why not just charge your federal taxes to your Citigroup credit card? Then stiff them on the payment. The IRS can’t go after you because they already have their money. If that fails, send the bill to Wall Street. Amex too, they’re fishing for a tax sponsored bailout.

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avatar Pat

I just received a letter in the mail my APR was going from 10.99% to prime PLUS 10.99%. Never had a late payment never carried balance over 20% of my credit line.I’m glad my shredder is in working order

I saw where you can opt out and keep your current rate till your card expires. That’s about a year for me.Then Citi cancels it. If you don’t opt out changes start in like 3 weeks!

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avatar CreditCardsSUCK

#26 Nathan Aaron:

If you opt out, you will be able to continue to use your card until the end of the year OR the expiration date of your current card (whichever is LATER).

At that point, you can continue to pay your card down under the current terms, but cannot make new purchases.

You will NOT be asked to pay the balance in full at the end of your term.

I opted out. 5.99% to 14.99%. Yeah RIGHT!

Only bummer is that my credit limit was over $17K. All other cards only give me like $4k. Oh well I shouldn’t spend that much anyway!

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avatar Rascal

Thought I’d throw in my two cents as well. Looks like we’re on the hook for the 45 Billion one way or another. Whoo Hoo! Just got my “letter” today, my rate went from 7.99 Fixed, to 14.99 Variable… WTF… that if my math serves me right appears to be a whopping 50% increase in interest on every purchase.. Oh, and they conveniently forgot to put an explaination in the letter.. so when I called their CS reps they didn’t know anything about the increase, so I had to wait on hold with some lame A– elevator music for 20 minutes unitl a “Supervisor” got on the line to explain that they are eliminating all fixed APR accounts, increaseing the rates to be “more in line with their business” That’s horse–! I’m a good customer, never been late on a payment in my life.. 20+ years worth !!! Took me all that time to earn a good fixed rate, and because some friggin –holes in the mortgage and banking side of the group decide to get greedy and make really really really bad business decisions with regard to loaning money.. guess who has to pay for it.. we all do.. us – our kids, grand kids, and generations long after we’re all dead n gone. I say, since i now have a defacto stake in their business, they owe me a copy of their spend plan for this bailout BS… I’d be willing to bet that some of those GWs will find their way into their charge card lines of business… why? because they’re all interconnected – so… unless someone can provide this plan, and verify for sure that none.. and I mean none of that 45+ Billion in our money is going into their CC lines… i’ll be skeptical…So lets see.. why don’t they take their CEO and Senior Executive bonus pools and put that money back into their business model, they they can pay themselves interest and put that back into the business….

or.. how bout this … and mark my words.. within the next 6 months or sooner you will see Brian Williams on NBC say this… Breaking News… the government will now give Citigroup 100 Billion to bail out it’s charge card business in addition to the 300 Billion already earmarked this year”. You gotta figure those rotten SOBs have got that all figured out too. I’m not usually a conspiracy theorist, but you gotta wonder given all of the recent events this year.. perhaps this is the mother of all cons and we are the unwitting participants….

As it was explained to me.. you can “Opt out”.. which is something I may consider at this point. My issue with this is that they are blaming the current lending environment as the reason for the increase, an environment which they themselves helped to create, and we the customers & taxpayers and ironically “those who are responsible for the bailout”, are now being asked to poney up.. Well – here’s thought.. since I now by default own a part of their busieness.. WTF are they gonna do for me. as a matter of fact.. since we all collectively own about 7 Billion in stock now, we should then have a pretty influential proxy vote. So let’s collectively vote to keep our APRs the same.. Hey we’ve done our part, we made our payments on time. lets make them do their part.. since we’re the one’s that are gonna save their A–… Oh and BTW.. bailouts in my opinion should include some very harsh performance measurements…. when are we going to see those in the news?…

The way I see it, we the people who pay our bills on time. should not be penalized for the stupidity and greed of a system that will always seek to be dishonest. Oh.. and they can take the 400 Mil they want to spend on a friggin sports venue and put that back into their so called “business model” too… and.. they can stop sending me stupic assed credit card offers too.. rotten bastards… can I sue them or harrassment if they continually send me unsolicited CC offers, even after i have written to them numerous times to stop sending them?…. I know here’s a compromise…. they can pay off my balance and I won’t consider legalities….

Speak up America!.. Speak out for the poor wallet’s that don’t have a voice…or at least the right to keep your APR the same..

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avatar Anon

My credit scores are 739, 723, and 741. I do carry a very large balance with Citibank, but have always paid on time. This excerpt from Citibank’s letter to me: “We are increasing yoru variable APR for purchases. Your purchase APR will equal the U.S. Prime Rate plus 18.99%, with a miniumum APR of 24.99%”. A change from 10.49% to 24.99%? I opted out.

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avatar Citi Card holder

Got my Opt out letter in the mail last night. im at 6.79 rate now and they want to jack me to 14%. This is the best card i own and now if i want to keep the thing ill have to pay over 450.00 in payments a month. Some of us need these cards right now and hell they just got a BIG bail out yesterday and still doing this high rate BS i told the lady i would think about it. I also never have been late on my card and she said i can OPT out and my account ends in 2 years. I just got my rate lowered and this BS happnes.
Treasury and the Federal Deposit Insurance Corporation will provide protection against the possibility of unusually large losses on an asset pool of approximately $306 billion of loans and securities backed by residential and commercial real estate and other such assets, which will remain on Citigroup’s balance sheet. As a fee for this arrangement, Citigroup will issue preferred shares to the Treasury and FDIC. In addition and if necessary, the Federal Reserve stands ready to backstop residual risk in the asset pool through a non-recourse loan.

In addition, Treasury will invest $20 billion in Citigroup from the Troubled Asset Relief Program in exchange for [$27 billion of] preferred stock with an 8% dividend to the Treasury. Citigroup will comply with enhanced executive compensation restrictions and implement the FDIC’s mortgage modification program

This is BS they get a bail out and still saying they have to raise up my rate. I told the lady last night how much the bail out was for them and she said O it cant be that much. Yea.. Its our hard earned TAX money thats bailing them out and this is how they re-pay us raise our rates. Most of us will not come back to them after going back on there word. what good are you with out your word..

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avatar Andi

I just got my letter in the mail too, this is very unfair. My new rate is 14.99%, the old one was 6.9%. I carry a substantial balance on this card, which is another strong reason for me to opt out of this trap. The sad part is that all my other cards (and I have very good credit, always paid on time) are no longer offering balance transfers to me as of this last month.

Rates should go up when customers do not pay on time, basically when you are delinquent on your account and not because Citi is going down (actually they’re getting bailed out by the government). I am fully aware of the current economic situation, but that does not mean credit card companies can do whatever they want. Who protects the customer?

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avatar Cara

They said that they were only raising interest rates on average 2-3%. Mine was raised from 7.99 to 14.99%. Everyone I have talked to has a similar hike.

I have opted out.

Do not use your card ever again. Do not give them one more penny than you are obligated to repay them. If you continue to use their card, remember that they will get a transaction fee. Those jerks don’t deserve it.

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avatar Rascal

Just sent this issue to NBC Nightly News – hope they do a story on these SOBs.. especially since we the taxpayers and customers who just got our APRs hijacked… have graciously decided to bail their Asses out. to the tune of billions of dollars.. Oh ahd what about today’s message from Sec Paulson.. 800 billon more to spur consumer spending.. how the F*** is raising the APRs of otherwise solid customers going to get people to go out and spend on Black Friday?.. Tell Citibank to fire the genius who came up with the idea to raise APRs across the board to increase revnues…. In the long run they will just lose valuable and loyal customers… but then again, if they run their business like that it’s no wonder that they need billions in taxpayer bailout cash.. Hmmm……wonder what board meetings are like at Citibank.. maybe like the careerbuilder.com commercials with chimps from the superbowl a few years back.?

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avatar Contrarian

I have a different take on this issue. If, like me, you have a decent credit score and a balance you can pay off without much stress, don’t opt out. Negotiate: loosing your credit line with Citi could hurt your credit score, making you more likely to hit the radar screens of other lenders who are itching to reduce their exposure to the consumer.

I got the same Notice. The rate on my Home Rebate card, Citi told me, was going from 8.99% to 14.99%. At first, I was angry. I have a zero balance on my card, a perfect payment history, and I’d just paid off tens of thousands of dollars in Citi private student loans in the last year, just one year after grad school, at time most people were defaulting on their loans (yes, I’m lucky I have a job that pays a decent salary, but I also didn’t buy any furniture besides a bed, and I chose to live in Queens rather than in the Upper West Side in Manhattan).

But then I picked up the phone and called the opt-out number. Gimme a break, I say; I’m just the kind of customer you don’t want to lose at this time. Well, I can’t help you, dude; our cost of borrowing has gone up, and look, you’ve got the lowest rate we now have, some chap says.

Can I speak with a manager, then? Two minutes later, he comes back. No manager is available, he says, but alas! I’ve found a way to cut your rate to about 10.99%. I took the offer, and then followed up with an email appealing the lowered rate. We’ll see what happens.

Bottom line: Overreacting by closing your card could hurt your credit score. Consider negotiating. I don’t plan to carry a balance EVER, but I’ll fight for the best offer I can get from lenders — zero-percent offers, points, cash, and the lowest cost of borrowing out there. You might want to do the same.

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avatar flygirl

Received my letter yesterday. Same as some above – fixed 7.9 jacked to 14.9. I called and asked why I, as a good customer of over 4 years, am being penalized for other people’s bad decisions? The rep kept repeating his canned scripted response. So at the end of July I will no longer be a Citi customer.

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avatar MAD MARY

I received a letter from Citicard stating that my rate was increasing from 7.99% to 14.99% – an increase of 87%. I have had the account for 6 years and have always paid my bill on time and have a FICO score of 725. I contacted Citicorp and was told that since I have a good credit and payment history, my rate would only be raised to 10.99%, still an increase of nearly 40%. I asked how they could justify the increase and was advised that the cost of doing business is increasing. I reminded the representative that Citicorp had sufficient cash to purchase Wachovia, so they couldnt possibly be doing that bad. I spoke to 6 different people about lowering my rate and finally talked to someone in the Presidents Office and after 20 minutes of arguing, I finally got them to keep my rate at 7.99%. You must be persistent with Citicorp and if you do not get any satisfaction,ask to talk to the persons supervisor and keep going up the ladder to the Presidents office if necessary,

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avatar Rascal

All,
I recently read Mary’s comment and decided to see what I could do for myself. Mary was right, if you are persistent you can do a bit better. I had some time today, so I figured i’d try. I had to call a few times cause I got disconnected twice.. strange that both times happened during a call to a CS rep who was “trying to find me a better rate”. If they come back with a rate that is just below what they quoted you in the letter, ask to speak to a supervisor. When the supervisor comes on the line, remind them of your credit history, ( if it’s good), if you know your FICO score and it’s above 700 all the better. * Since they base credit decisions on this… tell them you are the kind of customer they want because you will be using the card.. also tell them that the decision to raise APRs across the board doesn’t make business sense because it will end up driving good customers away… to other cards… name a few if you want. Remember, they need you to make money… and if you are a good customer then they’d be hurting themselves. You can also mention the billions in bailout funds they just got.. which as we all know are taxpayer dollars.. and guess what “WE” my friends.. are the taxpayers….. plus this past week the treasury department just approved another 800 Billion program designed to help .. “GUESS WHO”?.. credit card companies….. and other lending institutions * I’m referencing Sec. of Treasury Paulson’s speech on Tues or Wed last week… so if you arm yourself with some recent factoids.. they “CitiBank” will understand that you are in the know about what is going on. You also don’t have to put up with corporate double dipping.. which is what they are perpetrating..Tell the supervisor that you’re looking to keep the lowest rate possible. In my case I didn’t do as well as Mary, but I managed to do a 9.99% fixed arrangement, as opposed to a 14.99% variable one.. This was my fourth call to them, and while I really felt like arguing some more… ( you can do so according to your tolerance for stupidity).. my tolerance got maxed out, so I opted for the 9.99. Anyway pay attention to the date on the letter, cause if you don’t contact them.. the new APR will go into effect.. and you could find that your payments will go up significantly. These issues are personal decisions that we all must make, but before you get really pissed and opt out.. ( I thought of that when i first read the letter) …..like Mary said explore what if anything happens when you do.. if they close the account.. it can have a negative effect on your FICO score.. which can affect other lenders as well.. Not sure what happens if “You” close the account with a remaining balance but my guess is that it’s probably not good..

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avatar Chubby Church Cat

The other day I heard someone complaining about Citi raising his rate. I thought, well, it won’t happen to me because my credit score is high and I have a perfect history and I like Citi’s online banking. Then I got my letter raising the interest rate to 14.99%. When I called they wanted to give me a better rate. I just said no way–I don’t want to do business with Citi any more. I gather a lot of people are complaining.

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avatar David F

I’m not so sure that alienating customers is the best way to keep a business afloat in difficult times.

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.

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avatar Not My Citi

Hey Paul. I’m Paul. I got the same letter everybody else got. I just went down from 7.74% to 6.74% last month, and then I got this letter stating that they were changing my Citi Diamond card to prime + 18.99, currently 24.99%

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

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avatar Mike

There are two issues here: 1. is this good business on Citi’s part, and 2. is it fair.

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.

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avatar nicole

I actually work for Citi, and just to let you all know, other credit card companies are doing this in the future, Citi is just the first to jump on the wagon. American Express has started the increase as well. The mortgage side that received the bailout has nothing to do with the credit card side. They are two different sects of Citigroup. Many of you are all upset and I see why, but its a damn business. If you dont like it, take your business elsewhere. Even though many of you have very oustanding credit scores, that doesnt mean we’re trying to not reward you. Your increase could be due to the kind of card you have or many other factors. So like I said, go elsewhere if you dont like it.

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avatar Joe Sixpack

I don’t think that I can fully agree with nicole’s comment above.

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….

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avatar Paul

Hi Nicole. I’m Paul. I agree, I will take my business elsewhere. You mentioned American Express. I happen to have one of their cards too. Another one that I’ve had for about 10 years. I will drop their asseTs just as fast, if they decide to pull this. I remembered to ask my friendly Citi customer service rep if I had any late payments, trashed credit score, etc.. The response was that none of that was the reason. It was simply the “financial situation” and he asked that I bear with them until it levels back out. He stated that they did not want to lose any customers over this. In the meantime I’m supposed to pay somebody Mercedes payment at corporate. heh screwthatcrap

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avatar Andi

Hi this is Andi again, I posted here about a week ago (comment #35)

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!

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avatar Janos

This is a serious problem, and sadly… we are the ones who are paying for it with out own tax does going back into the deep pockets of the banks… The government giving these fools 20B for practices, which they will keep doing… Congress is not giving the auto maker companies money without certain rules that they must follow… except they will give BANKS money, with no rules… and we all know.. as Leigh said it best.. “None of this money is making a difference because the companies haven’t changed their business practices, they are just using the money to continue their failed practices.”

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!!!

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avatar Rascal

Just saw on Headline News today 12/18…. they ran a story on this very issue. Thanks News Media!! hope all the outlets pick this up.. and BTW nobody at CitiGroup cared to comment or talk to HNN when the reported questioned this practice….. Others are now calling this issue “Rate Jacking”… You will also be interested to know that as of today 12/18 legislation passed overwhelming in the House of Representatives which would have prohibited “Rate Jacking” is now languishing in the Senate banking committee.

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…

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avatar Aquaskier

I received the “letter” also. Score is 740+ across all 3. I have 2 cards, Never been late nor been a “minimum amount” person. 1 with 25,000 limit & carries a balance of several k every month, but I pay large every month, it works for my needs. 2nd card is 0 & has been for 2 years, 15,000 limit.
Card 1 is going from 8.99 to 16.99. Card 2 is unchanged @ 7.99? ???

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.

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avatar AnnoyedCitiCustomer

After 22 years of pay four times the minimum, never miss a payment, loyalty to Citi, even when their salespeople tried to sell me every product under the sun in an attempt to suck more change from between the cushions of my life, I find that my loyalty will not be rewarded, nor will it be reciprocated. Stop giving me “advantage points” that aren’t worth the screen space they take up and which take years to accrue (10 years to buy a stinking blender) and stop promising me refunds, and just keep my bloody interest rate low.

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

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avatar Beth

Never missed a payment, but yet my FIXED rate doubled on Citi. I am going to transfer every balance I have with this
company and I hope THEY SINK!

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avatar warrren

BETH: Wow are u so right. Let me know where to are taking your business, I’m right behind you.
Warren

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avatar Phyllis

What’s interesting is that they more than doubled my rate from 6.74% to 14.99, told me there was no reason – just couldn’t afford to offer that rate. Then I closed the account.

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!

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avatar Anon

Phyllis, I’m assuming Citibanks terms on your new card state they can change the terms at any time for any reason? Do the terms include the right to opt-out, if they raise your rates on this card?

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avatar Pete

I just noticed my interest rate went up this month by 3 points, I called citibank and asked for an explanation. They explained that becaue of the economy we had to raise our rates and that I was sent a letter informing me of this, so if I didn’t want my rate increased they wouldn’t raise the rate but when my card expired I could no longer use it. then they also gave me another option since I wasn’t to happy and was just going to go with closing the card. They said they could lower the card but not back to what it was and wave this months interest rate and this way I could still use the card after the experation date. I went with that plan but am thinking of cancleing it in the future, my chase card has a single digit rate and I was even late with a payment on that card last month.

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avatar Rebecca

Like most people who have posted on this website, I have always paid on time and paid above the min payment every month on ALL my credit cards. This month I almost had a heart attack when i saw that my 6.99% interest rate was raised to 11.99%. I was beside myself because I know that I had not missed a payment because I am on automatic payments plus I plug in manually online an additional $50 or so each month. I called customer service and asked what was going on, and I was feed the same line that everyone else about the economy. I explained to the customer rep that I refused to be punished by their careless planing and if they could not bring the rate back down i was dis enrolling in automatic payments and they were not getting a payment period. i was placed on hold and was later told that they would bring the interest rate to 8.99% and that was the best they could do. I kindly replied, being sarcastic, that they can put it back to 6.99% because in the same January statement the fools included 6.99% checks. Don’t tell me that you cant because you can!!! i was put on hold another time. she comes back and tell me that they are putting it back to 6.99% but I am still liable for the interest. Guess again. i requested to speak to a manager and when i did not hold back anything. i asked what kind of message are you sending to people who are in good faith paying their cards on time when there are people filling bankruptcy for whatever reason. why punish those who are honestly trying to do the right thing? I got both names and ID numbers as well as a case number to the manger who put the rate back to 6.99% and credited me the finance charge. I wish everyone good luck!

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avatar Ray

I just wanted to add another example of what Citi can do if you call them. The rate on my Citi VISA card went from 13.99 to 24.99. I called yesterday, 1/25/09, to see why the increase. The call rep said it was just a business decision unrelated to anything specific about my profile. The call rep only wanted to know if I wanted to opt out. He didn’t offer anything in the way of a slightly improved interest rate or anything else. I wanted to do some research and see what the ramifications of opting out were. I called back this evening and asked to opt out. The call rep I got this evening, without any prompting from me, offered to issue me a Citi MasterCard with a rate of 9.24%, transfer my current large balance to that card with no transfer fees or annual fees, and give me a discount on my current bill to bring it back to what it would have been if my interest rate had never changed. I took the deal. I know there could be trouble in the fine print , but it seemed a good alternative and so I wanted to get word out to people that this option is possible. Call Citi and be polite but firm about your intention to opt out, and see what they have to offer. If you do end up opting out it’s not a bad deal. You get to continue with your pre-change card rate, you get to use the card until its expiration date, and after that you can no longer use the card but you can continue to make monthly payments under your old interest rate and minimum payment levels.

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avatar Mark

The interest rate on my Citibank credit card jumped from 6.9% to 14.9% in one month. I have impeccable credit, no late payments. I promptly paid the balance on the card, when I noticed the interest rate increase. When I asked customer service why my rate jumped, this is the response I got:

“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.”

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avatar Amen!

Amen brother! I’ve been notified by one card holder than my interest rate is doubling. I’m so mad I could spit and to top it off, that is probably just the first one. Every (democratic) congressman and senator should lose their job over this one! Just who are they trying to help? They are making things worse for the common man and fattening the pockets of the companies that caused the mess in the first place. It would have been a great plan to pay down the credit and mortgages instead of just handing the money over to the wolves.

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avatar Paul

What are you talking about dumocrats? They are and were always the problem. They are to blame for the folks who should not have been able to buy homes yet got approved because the DUMOCRATS wanted them to have homes even though they were not qualified. And now Mister CHANGE that everyone thought was so great is throwing Monopoly money into our economy and essentially making your hard earned dollar(if you work) worth 10 cents so in return it will make you have to spend more money on items because of the influx of monopoly money that was no where to be found which makes our dollar worthless.

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avatar Tom

I was also one of Citi Banks best customers. No Longer. The reason they are raising rates on their best clients is because they are desperate for cash. What happens to most good customers who have balances when they raise rates? They will pay it off or transfer the balance to a new card who accepts the new balance and pays Citi off. Either way they get the cash. It is will be a long term loss for them as they are losing good customers but they are getting a big intake of cash in a short term to try and off set the losses they are having.

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avatar JustQuitCiti

So I just got the letter from citi advantage telling me that because I opted out, they won’t renew at the end of next month. I called them and they said they don’t have any better rates even though I have impeccable credit and have never missed a payment and used my card for business expenses last year to the tune of over $60K in travel costs. But apparently they don’t find my business important. I just applied for the Discover card and got approved at the lowest rate (11.9), and gives me 2 miles for each dollar. Same yearly fee as citibank was. I wonder when they will get it, that those of us who have good credit and actually provide good income at low risk to them should be treated like gods in this day and age. oh well.. cya citi will be my new moto!

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avatar ghost6840

Not only are citibank raising interest rates here in Australia,they are also using dodgy techniques to lure/relure customers.They routinely offer the cheapest personal loans here by far(8.99% fixed for 4 years),yet it would seem no-one is eligible for such a loan.Then after discussions on the phone about this loan they call you up and say eveything is ok with your application and its being processed omitting to tell you it is not for the amount discussed nor for the % rate offered,but a higher one ( 2 separate occasssions 2 separate customers 1 old,1 new…same technique) .Seems you are more likely to be able to pay back at the higher rate!!! what a joke.As a long standing customer do you think I can get them to discuss the matter.No you have to go through the gov’t companies watch dog here which can take 45 days.Integrity has a different meaning when you are a bank.

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