Citi can drop dead

[Hellgate]

So I get a letter from Citi stating that the APR on my credit card will increase to 19.99%, based on prime plus 13.99%. This is a variable rate for purchases. They also increased the cash advance rate to 25.24%, that is prime plus 21.99%!

Oddly there is now an option to opt out. So I called and the nice lady from India explained that due to the economy Citi had to raise rates. What??? I explained to her that I’ve been a customer for 12 years, usually paid in full and on time, occasionally carried a balance. I stated that the state of the economy isn’t my fault so I shouldn’t be penalized with a higher rate as I’ve been a good customer and not defaulted. Then I told her I wanted to pay my bill in full and cancel the card. She transferred me to her manager in the US. I explain the whole story and that 19.99% was unacceptable. No problem you can opt out for 60 days. Great just cancel my card please.

With the cost of money a history lows its appalling that credit cards are at a historic highs. Auto and mortgages are a bargain. Stupid banks…

 

[Norm]

I'm not a big fan of banks. Good for you for paying in full and getting out. I never carry a balance and I've preached this to my kids.

 

[macem29]

there is no defending a 13 point spread for a credit worthy customer, despicable...

:spank:

 

[macem29]

double post bandit strikes again

 

[Wavex]

Watch your credit score, it will take a hit if you cancel a credit card... ri-di-cu-lous!

 

[Andz]

Stop complaining, interest on credit cards is 28% here...

 

[Less]

It's happened to me on all 3 of my major CC and I just got the same type of notice from Sears. On their card they are going to 23% with a default rate of 29.99% which I believe is the maximum allowable in Massachusetts, and I have a credit score of over 775 on all 3 bureaus. It's absolutely crazy!!

It's actually going to be good for me, forcing me to stop using my credit cards and get them cleaned up as fast as possible. Then I'll only use them when they offer me 0% on purchases for x amount of months and pay it off in time.

I'm even using my home equity line to pay them off. I pay 1.01% BELOW prime on my equity line and the interest is deductible

But be careful. It's actually better for your credit score if you DON'T close the accounts but rather pay them off and don't use them. A big portion of your score relates to the total amount of available credit you have and the percentage of credit you are using. So if you have 3 cards of $10K each and only owe say $1000 you have available $29K and are only using 3.3%. But if you cancel the two cards that are now at $0 you would only have $9K available credit and you would be using 10% of your total credit. This could cause a drop in your credit score as you have less total credit, less available credit and you are using a higher percentage.

It doesn't seem to make sense but it's all computer formulas and they like you to have a lot of available credit. It shows others trust you when you go to buy a car or a house.

 

[CHEMIKER]

Yep, I got the same thing with WaMu (now Citi I think). I called to complain about the higher rate for no reason, and got no sympathy. I threatened to cancel (which has historically worked very well), and was told "ok, your card is canceled, you should receive written notice of that in the mail soon. Thank you for your business". I have done that in the past to get out of yearly fees, and it has always worked, but this time - nothing.

 

[Wavex]

It may actually be good for the US in the long run as ppl may finally realize that you can't have everything you own on a credit line... The "credit culture" needs to slow down and ppl need to learn to live within their means.

 

[dean owens]

The "credit culture" needs to slow down and ppl need to learn to live within their means.

now that's just crazy talk. we don't allow that sorta stuff around here. looks like somebody needs to go back to france.

 

[Hellgate]

I'm appalled. I've got a very good score and everyone is correct, if I cancel the card my score will drop. I'd forgotten about the amount of available credit ratio.

For this card I pay $50.00 a year to get airline miles. I just rather be done with it and move on. I can get another and better card through my broker.

Oh well...

 

[FZ1inNH]

This is part banking fault and our own government. Because of some upcoming law changes that prohibit issuers of credit for credit card purposes, a lot of the normal fees they place on our credit cards will become illegal to charge. In order to recoup those costs, they are reflecting the loss of income with higher rates. Almost all of them either are or will be doing this so as much as it sucks, be ready because it is likely you will not have a card that doesn't take the same route to sustain their income from issuing the credit.

As for closing them, yes, you will take a hit on the credit score, but if you are in a good position without a need to finance anything for two to three years, it's more than worth it.

We just closed almost half our cards including ones we never carried a balance on such as gas cards. We are down to 3 cards each and those are ones that only offer rewards, rebates and cash back. The rest can kiss my arse! :thumbup:

 

[FZ1inNH]

I'm appalled. I've got a very good score and everyone is correct, if I cancel the card my score will drop. I'd forgotten about the amount of available credit ratio.

For this card I pay $50.00 a year to get airline miles. I just rather be done with it and move on. I can get another and better card through my broker.

Oh well...

Pete, until it all sorts out and the laws are in place, there's not going to be a lot of those great credit offers floating around. If you do see one, seriously scrutinize the fine print before you attempt to apply for it!

 

[DaveOTZ]

There are much better ways to recoup costs for banks... Like NOT buying baseball stadiums... NOT paying crazy salaries... NOT paying gigundus bonuses... Lending money to the right people the right way in the first place and not expecting to make artificially inflated profits from loans that they wont see a dime from. By gouging on interest rates they will encourage many people to charge less and further encourage people that do not intend to pay back their debt to charge up while they can...

 

[cv_rider]

I heard recently that banks were going to start charging you a fee on your CC if you DIDN'T carry a balance. In that case, you are punished for not allowing them "wet their beak" (taking a phrase from The Godfather) with the usurous interest rates.

 

[derf]

There are much better ways to recoup costs for banks... Like NOT buying baseball stadiums... NOT paying crazy salaries... NOT paying gigundus bonuses... Lending money to the right people the right way in the first place and not expecting to make artificially inflated profits from loans that they wont see a dime from. By gouging on interest rates they will encourage many people to charge less and further encourage people that do not intend to pay back their debt to charge up while they can...

Isn't that what a credit card account is? Maybe that's why the rates are going up? :thumbup:

 

[nextfriday]

At one time it was a good idea to threaten to leave a bank and go with another card if they didnt lower the rate. Try it. I've done this many times before with success and kept the card in question. I'm talking rates of lower than 10%. Maybe those days are over. Credit cards are no fun when you cant pay them in full.

 

[C-bus Biker]

Yep. Great credit... high 700s, and they all just raised my rates to cover the the free-loaders who are allowed to just walk away (and keep their flat-screens). :ban:

 

[DaveOTZ]

Just to throw in a dash of context... when we say freeloaders I dont want everyone to just think of "Cracky" on the corner and the big screen TV in the tenement.... Google Yellowstone Club "bankruptcy" lots of poor and middle class defaulters would need to declare bankruptcy (most of them/us because of medical expenses) before they could come close to the criminals at bank Suisse and the like... I would call myself a fiscal rationalist... Don't regulate... Persuade people to regulate, large scale speculation in an open market should call for appropriate risks... If I gamble Im in debt... Im I gamble with money that employs people I should be in debt and without limbs...

 

[VEGASRIDER]

I'm a cash kind of guy. Hadn't owned a credit card for about 3 year now.

With the latest gadgets for the people in the idenitity theft business, you're probably better off. There are business that use wireless devices to charge your cards, and if it's a sloppy system, somebody can piggy back the transmission and get all the informaton they want and wipe you out. My cowoker just got cleaned this way. Yes, she got reimbursed, but had to take several days off to deal with the police report, bank, etc. It was very time consuming. Better off just paying cash, than using the card, even if it's a debit card. Your information can get stolen.