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CITI's New APR = 30%, They're Toast
I got a nasty letter from Citi Bank recently. They are raising the APR on my credit card to 29.99%.
This
is a losing strategy for Citi. Larry Small, the former Citi CEO built
the bank into a powerhouse by leveraging global consumers. Now they are
stabbing those clients in the back.
I have been doing business
with C for thirty years. I have borrowed from them and paid them back a
number of times. I don’t owe them a penny and I will be closing those
accounts. I don’t want to do business with people who try to put muscle
on me. The end result will be that the only consumers who will do
business with C are those who have no intention to pay back those loans
in the first place. Talk about a bad bank.
The NYS usury law
sets the top rate at 16%. I am sure that Citi’s legal guys have found
an angle around this. No doubt the rules are more favorable in S.
Dakota where this letter originates. I live in NY and last I saw Citi
had its headquarters here. This appears to violate the spirit of the NY
statute. Possibly AG Cuomo will have an answer. I will ask him.
Citi
is owned by the taxpayers as a result of TARP. It is receiving billions
in additional subsidies monthly in the form of zero interest rates from
the Federal Reserve. One would have thought that they might have gotten
the message by now that abusive lending was ‘old school’.
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Glad to see the comments.
I thought about moving our business over to Schwab (where I also have a MM account) but I trade through Scotttrade and I'm trying not to commingle things. The Swabbie also has a lot of BS fees (their cartoon ads notwithstanding) and in the current environment I want to keep things LOCAL.
Besides, where I live the CU has branches all over town and the branch I use is in a supermarket with better weekend hours than the Skank ever had - in fact, the CU replaced a WFC in that same supermarket. That's what convinced me.
Starve the Beasts...
You have to understand that C and BAC are so loaded down with toxic assets (the ultimate oxymoron) that without the misguided help(?) of Uncle Sucker, they would have been DOA last winter. When their common stock dropped to $1.00 per share earlier in the year, I found it tempting, but fought the urges to buy. They actively prospect for deposits, offering a whopping 2% on a 5 year CD, scanning bank account balances---then personally phoning holders to recommend consultations as if they could possibly help. All this desparation--29.9% APR , from a doomed zombie that could'nt find it's ass with both hands...AND it's ass. Pitiful. RIP, C.
its amazing that the first year that the banks dont make massive profits (keep in mind their average profit margin has been 21% for years) that they will result to wholescale rape of their customer base.
I got my citi letter on Oct 12. Paid off the balance on the 13th, and closed the card on teh 14th. I don't expect them to be around much longer.
I am in the process of moving my CCs and checking accounts from BAC to Schwab, where I already have my investment accounts. MUCH better rates and service on everything from MM accounts to mortgages. FWIW.
You should be happy, average APR in Brazil is a bit more: 150%
Its matter of convinience VS principles.
I have stopped using my CC from the last month. First on the list was AMex. The only credit cards I shall be using are the ones issues by Credit Unions. They seem to have reasonable rates and by the way, all Credit unions are non-profits.
If I dont give them my 15K/per year transactions, and they usually make a 1% on it in tx fees, that would lose 150 per year per customer. And a million customers do this, it would amount to 150mill. It may be a drop in the bucket, but it is just a start. For Amex, it can be disastrous, as their transaction fee and commissions are even higher.
When companies act like Shylock, we need to cut them in their roots. Anyway, with massive consumer deleveraging, I would like to see how they are earn.
File your complaints on-line with the consumer division of the Federal Reserve and the Office of Comptroller of the Currency. The Mega Banks hate this because they have to respond in writing to these agencies.
Thanks for the suggestion. I just finished filing my online complaint with the OCC. I've been spewing a lot on several discussion forums for the past couple of days, but wasn't sure to whom I should send a formal complaint that might make a difference. Or at least, as you said, cause Citi just that much more of a headache in being forced to respond to my complaint via the federal agencies.
Have we forgotten that C is being run by Geithner?...They don't take a piss without a hall pass from Geithner!
Do not deposit cash in ATM...The roaches are taking the cash...they know the food will be no more very soon. If you or someone you know is missing a cash deposit. Tell them you have your receipt and your calling, NYPost, WSJ and Fox news and AG in your state. You will amazed how fast they credit your account with your missing cash...
in 2003 Citibank issed a $25,000 cash payout that was aplied against a mortgage, because the applicant didn't know how to fill in the form and thought the mortgage reference (someone else's by the way) would get her the card and who ws not legally present in the United States, nor legally employed nor even paying taxes.... but Citibank USA credited (my) mortgage which I ended up having to refinance because.... I won't go into the rest but F(*K Citibank. all I ever got from them were threatening letters.
Has anyone thought about this?
Do you think that, besides the greed mongering, that this has something to do with the banks selling off their ownership of Mastercard and little over half of Visa? Maybe the revenues are going elsewhere, but the banks are holding the debt?
It appears that Citi has decided against attempting to leverage whatever remains of the franchise value of its consumer credit division by selling it or merging it with BAC 's unit, Capital One or Discover and have elected to let it wither and die on its own.
There is a building narrative in here somewhere for Citi, and by extension the government that approves of all Citi decisions to pursue this option outside of the catastrophic stupidity of thinking millions of consumers, even American consumers will just swallow 30%.
Regardless, Citi is taking the Dollar Tree & Quick Loan Funding business models and applying them to the whole of the Citi franchise. Stupendous!
Emphasis on the "stup" in that, eh? Add an Id to it and you have super-ego-less greed reigning over the situation.
Hope you are well tonight Miles. I never know if asking is the right thing. Letting your mind drift across the net to meet ours must help you leave your body. Calling attention to how you are may not be helpful. But I do wonder if you are okay. I trust that you can tell netfriends what is best for you and to know where our hearts are as we ask.
MsCreant, you and Minnesota have been mixing I see... :-)
Acceptance is a beautiful space dear friend. Do not be concerned with calling attention as this aspect is simply part and parcel of the human condition of experience. Experience that was mine to choose as an "engager" of life. As is much of what we discuss. What is best are moments like this one provided by Bruce where we can shine a bit of light, acknowledge a shared experience and stir the pot.
I certainly hope I can tell! Wouldn't be half so much fun otherwise.... After all, eyes still work and I have elected to attempt to lead by example in my goal of Screen Some Rot. CD can tell ya if you missed it.
Peace Sis
Hey, you think you've got it bad in the 'ol US of A? Check out what Citi does internationally.
I live in Mexico where Citi owns the 2nd biggest bank here, Banamex. It's really one of their jewels and has made money hand over fist all during the crisis, as have all the big international banks here, who own like 90% of the banking system.
It's hard not to make money when you're charging 100% interest on Credit Cards. Yes, you didn't misread that, 100%, or more, annual interest. There are store cards charging way more, like 150%.
Ain't legal usury grand?
Money that is loaned and held by credit card companies never existed. It is not included in any of the "M" figures. It is the worst form of money from thin air. The interest rates similar to loan sharks. Perhaps the only difference is that you won't be beaten to a pulp when in default (unless you count war)
Money that is loaned and held by credit card companies never existed. It is not included in any of the "M" figures. It is the worst form of money from thin air. The interest rates similar to loan sharks. Perhaps the only difference is that you won't be beaten to a pulp when in default (unless you count war)
this is the real boston tea party....close all credit card accounts and do what laughing_swordfish did by removing business from the vampire squid banks.....
fuck citibank, boa, jpm, gs, ms, hsbc, wachovia, db...
Hey, folks, do what I did.
Last September when it looked like it was all going to shit I paid off both C cards and closed the accounts - because it looked as if they would go under and wee wouldn't be able to cash in the rewards points anyway.
Closed our BAC card for the same reason and moved both the wife's checking account and mine from Skank of America (she'd been there 24 years and I had been there for ten).
We then moved to our friendly local Credit Union where we have a Visa account iwth a 5K limit (all we will ever need) at 8.99% APR. With the Amex for the Swordfish's travel we have all the plastic credit we'll ever need or use.
Except for travel or emergencies we use cash and the CU Debit cards. Plus the CU gives me immediate credit for checks I receive in the course of my business (no 3-5 day "holds"). Plus, they are nice friendly local folks.
Cheap fixed-rate mortgage (we live in a HOUSE not an ATM), two well-maintained paid-for older cars, clipping coupons and watching sales - thrift can be fun.
But the new trim pump and compensating tank and risers for the U-Boat - well, that's another story.
KptLt. Laughing Swordfish
9er Unterseeboote Flotille
:D
Just close your account. These guys are running a business, and will have lost a long standing relationship (bad business). Pleading to the Attorney General, even if you are privileged enough to have that kind of access, seems a bit juvenile though.
"Pleading to the Attorney General, even if you are privileged enough to have that kind of access, seems a bit juvenile though."
It is probably legal, but why judge this as juvenile? How else can he find out if he is a victim of usury if he does not ask?
No attack intended here, but this kind of passivity is what is giving all of these crooks licence to steal from us as individuals and as tax payers. It may not be worth the trouble to you to resist, but what of the next one after you who is not as savvy as you are?
They need to be afraid of us. They need to know damn well we know our rights.
Mscreant - there's no fraud here... they're being very transparent about what they want to charge... nobody's a "victim" - these guys aren't being crooks (they are crooks but not because of this).
You're rights? HA! How long are you going to have your "rights" when everytime somebody does something that you don't agree with, you run to tell daddy politician? It's exactly that kind of thinking that makes business people think its ok to use the government against you... and they will win, as they are 1. more organized 2. have deeper pockets 3. more politically savvy
no it's not juvenile.....when someone misbehaves
standing by idly doing nothing is hardly an
act of valor.....it is one of the leading
reasons why we are in the mess we are....
i hope he follows through...
"The end result will be that the only consumers who will do business with C are those who have no intention to pay back those loans in the first place. Talk about a bad bank."
terrific point, bruce, on the adverse selection that accompanies high CC rates...
The correct answer is to only charge as much as you can afford to pay upon receiving the bill. Carry no balances and you will not care if they want to charge you 300%.
You wonder what the limit is, don't you? I have one card that I barely use (it is a bitch to rent a car without a card - doable, but a real hassle), and it is like they keep jacking the rate up in case there is one time I forget to make a payment (which hasn't happened in years since I have a recurring calendar appointment that reminds me to pay the credit card, running until 2030 or something).
It is getting ridiculous - what are they going to do, jack the rate up to 3000000%?
The rules are simple:
1. The ones who don't carry the balance do not care while collecting whatever rewards,
2. The ones who can't pay do not really care while piling up the balance till citi cut off the card,
3. The ones who are in the middle of 1 and 2 above are the ones got really screwed up and will do whatever they can to become one of the two mentioned above.
Any way, citi is very much screwed and so is the whole consumer economy. It is high time to tell all your friends, family and loved ones that this christmas you will respectfully request no gifts from them whatsover and you will do the same.
The new nationwide sport is "Paying off the credit card drive."
For years my family has donated to charities in each other's names for Christmas. Less tacky than giving money, you do something good, and get the tax writeoff.
Consumerism is for shallow people.
I agree with you, but I am weak for my son at holiday time. He is genuinely happy and grateful and takes care of his things. He does not whine, or ask for stuff, and frequently worries stuff costs too much and he will often pass when I offer a treat. I see parents with label conscious whiney kids (he sees right through all that) and feel grateful I don't have to hassle with those kinds of conflicts.
I like to spoil him a little. I will not go into debt to do it.
But we are starting to discuss the charity idea. Other family members further out seem resentful when you suggest it. I'll shut up because this post could get too long.
I am thinking about giving them silver, instead, and an education on the economy.
excellent way to avoid the disgusting commercial
crap of christmas....
Or much better - "Defaulting the hell out of credit cards drive".
They sent me a similar letter but it never impacts me as I just pay my balance every month. If you aren't able to do that you deserve to pay whatever they are charging you.
Since nobody's said it yet today (that I have noticed)
Jump! you Fuckers!
Wouldn't it be awful to be one of the folks that answers phones for these asswipes. You know jobs are hard to find, and you gotta do this? Easier to be a prostitute. It's more honest.
The Indian folks I usually get on the phone seem to be happy.
Beautiful spike ghost!
Is Pandit the Bandit an outsource too?
I have a few accounts (a large one at C)
They sent me the same letter today so I called and threatened to move my money.
They put a "senior banker on the phone" and I was assured they "overlooked" something and that my rate would remain unchanged.
After 10 minutes of being verbally massaged over the phone...I pulled my money out anyway and closed my account.
fuckem
i love you man!!! you are my new hero!!!!!!!!!!
Way to go, pizza man!
That's what I'm saying Bruce. Go Pizza Dude.
Bruce I'm not sure how you ended up with Citi. I by geography have had a wachovia bank account since I was 10. I'd deposit my allowance n draw out a lil for candy. I know one day the goldenwest-wachovia-wells monstrosity will screw me like citi has screwed you. Thirty years with citi...shit man...brave new world indeed.
If you don't pay your card, how do you expect them not to increase the APR ? This is not like your govt handing out unemployment checks by turning on the press. As much as i don't like Citi or other TARP banks, i at least want a little honesty from us public and start living within our means. We can get out of the current mess if we get back to the basics.
I've got good credit, zero balances and Chase raised my rate to 13.94% just because. BofA cut my limit by 1/3 just because. Any of my cards try for an annual payment and it's shredder time. To hell with them.
Yeah, just call them and threaten to close the account. They reduced my interest rate from like 15 to 7.99 percent that way. It especially helps if you have no balance.
that is the way it is
they think by increasing interest rates they will increase revenues. that idea is about as stupid as it gets.....i think it comes from desperation. its the end of the line for these banks. they are in big trouble.
Lothar, a better idea. Pay 1 dollar over the total due. This way they have to send you a statement for 3 months and cannot charge you even a dime. That really pisses them off.
Just a thought.
I like it. A lot.