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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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Why deal with a broken, insolvent corrupt bank that does not care about anything except staying alive. They should be dissolved and would have been except for this ridiculous bail out. Check out local community banks that have not been involved with all the crap that is still festering in the insolvent banks.
We have 1 credit card and always, always pay it off every month or we do not use it until we have the cash. Not using a card is great. Debit cards work but the broken banks are trying to add fees there also.
Does "broken Arrow" mean anything to you guys.
Makes me want to spit.
Same here... One card, paid every month in full. It's not even with Citi, I never like them, same as never liked any other big bank...
I literally received an email offer from Citi while reading this - for a 2% CD.
My not-so-subtle reply for whomever may read it...
FUCK YOU CITIBANK!!!
I'm sure that 2% CD will cover the arse-raping you're currently giving me by jacking my rate up to 29.99% on my Citi CC.
Guess what? I'm just waiting on my cashed out 401(k) check to come and I am going to pay off all but one dollar on this card just so I can screw you on administrative costs every month.
You've lost your damn minds and I'm responding the best way I can - taking any profit you could ever make off of me again and making you pay for my account being open.
Bastards, the lot of you.
I suspect its their way of saying we don't want YOU!
My experience was like the guy above who had the late payment - I had forgotten about mine and they pointed out my rate was not jumping from 14.99% to 29.99% as I thought but from the higher 24.99% to 29.99% due to the late payment a few months back. Not that that makes it all better...but better than the 15% hike I originally though it was. I take responsibility for my credit cards so - the fault was mine, I did pay late and those were the terms in place for doing so when I took the card - so it is what it is. They did talk to me about an interest rate credit if I pay on time so really I will not be paying any more in %. I'm in process of paying off all my credit anyway so I'll pay for a few more months and be done with it. I don't like it but I ran up the balance when I couldn't really afford it and paid late so I have learned my lesson......and will use cash in future and live within my means. I'm not happy about the situation but these are the times and I'm the one who got the card in the first place and mismanaged it. I don't blame them...I just choose to change how I operate going forward.
Thanks for sharing your entire credit history with us.
My experience, call and state you have been a good customer all these years and they typically waive the late fee (on vacation). You can also negotiate down the rate, although I only pay off the cards and use it for the 1% off on all purchases, 5% on groceries cash back at year end (best card I found out there if you pay off cards and want a price discount- American Express Blue Cash).
Bruce, join the club. They have had me at 29.99% even though my credit has been perfect for about 15 years and my credit score is close to 800. They are IDIOTS!
Bruce,
Did you call the bastards? I have this card, I have no balance, and I have always paid everything on time. They even let me have 27 thousand for a couple of years at 1.9% (I paid off a 9% student loan, then paid citi off early). When I have called in the past, they have always bent over backwards to calm me down. It's like they try it on for size, if you don't protest, you get stuck, if you do, they lower it from where is was before they tried it.
If you know you are dumping the card anyway, why not call and threaten to dump it and see what happens next?
Or is it truly a brave new world???
I hate these guys. I just want out. That I have to call them to get this fixed does not suit me. They send this stuff to me and it is over. One strike and your out. Shit Heals.
Their loss Bruce. I don't have a term that covers the short sighted depravity these folks are exhibiting with this behavior. Sounds like you are already gone:
http://www.youtube.com/watch?v=RhHpEFz9pD0
No they just try to be as random as possible pretending there is some rhyme or reason behind it. Some people they go after and try to fuck, some they let slide. etc. It just sort of follows who can we suppress today rules.
I already defaulted on my Citi card last year. I got my TARP money back. Make sure you get yours.
Beautiful! I wish I had thought of that. Let's think big, what say we pick one of us to take out a large loan from C and the rest of us all buy credit default swaps against that loan defaulting. At that point our hero can default and we'll all cash in.
Gordon,
I don't normally roll like that, but I get so angry, well, damn.
Neither did I, until I realized the FRAUD that the banksters were perpetrating, after which it seemed fair game to me. You think 30% interest is too much? Wait till you find out that the money on which they are charging interest IS CREATED OUT OF THIN AIR I.E. DOES NOT BELONG TO THEM.
I was just gonna say, you aren't defaulting on money they took from someone else. This money is created out of thin air through the magic of fractional reserve lending.
Giving them the right to charge interest on it is pure theft. It can't be justified in any way.
It's not even "fractional reserve" right now, since they don't bother with the reserves part anymore. It's just "lending" (out of thin air) now - an out and out fraud.
nice work, but unless you had an amazing credit line, doubt you got your per capita portion of TARP
Something is better than nothing.
Sure glad we bailed these guys out, thank good our financial system is intact and credit is still flowing!
They did same thing to me...I called to ask them not to given I was a long-term dream customer...I always paid them, I sometimes carried a balance, I had even paid them for their stupid overpaid credit-watch crap but they said they couldn't give me an exception to this 29.9 rate because I had a late payment a few months before when there was bunch of lay-offs at my work and I frankly was not paying attention. I had berated them out of the late fee because the payment was ONE day late...but now I supposed to be stuck with 29.9.
So I am keeping the card so as not to lose credit or hurt my credit rating, I'm transferring my small balance to another card thru USAA who has always treated me reasonably, I'm cancelling the credit watch crap and will only use this card once or twice a month for some very very small charges enough to keep it "active". They just kissed easy money good bye, no transactions, no creditwatch crap, no interest.
To others who can't pay off card...if someone has a few thousand on a card they can't pay, how long does 30 percent take to bankrupt them...what is an average salary, 40-50k...how long can a 40k person with kids take on 30 percent interest on several thousand dollars.
Even with knew bankruptcy laws, the banks are killing themselves as the people bankrupting on them in the future with have nothing to ever pay them a dime. But what do Citi employees care, they will be rich by end of year, who cares about thier governement owned company.
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.
I can't cite chapter/verse or case law, Bruce, but I think this matter is already settled law, likely to do with the national association (N.A.) deal and having a federal regulator vs the NYS Dept of Banking. The credit card group has been hq'ed in s. dakota for years even when i was in banking up through 2000.
Any company that treats their customers in this fashion is going to end up toast (unless owned by the government).
well what happens is they usually will say that it is south dakota law that is binding and not your state law for interest rate limitations etc. at least they will try. some states go along with it. some don't. it is in the fine print on that thing they sent you with the card , called the card holder agreement. if you want to humbug with citibank, they will most certainly do the thing with you, that is for sure. they are the worst of the worst. they sue anybody and anyone at any time for anything. they are the sorriest bastards and the biggest crooks you can ever imagine. i don't know which is worse. citibank or crapital one....
I think at this point it makes a lot more sense to anybody who has a credit card to buy Gold and Silver with it, default on the damn card and then pay 20-30% of the balance to settle the account (if you want to i.e.) sometime in the future in wildly devalued dollars. With the PM bull taking off, this is also the most appropriate time to do it. Use the bankers tool of theft-via-inflation AGAINST them.
hsbc reduced my credit limit below my outstanding balance. I quit paying and taking their calls. that was 3 months ago. I just got a letter offering to settle for 52%. I'm gonna hold out for 30% F- you hsbc, who screwed who? feels good
Nicely done. May I suggest you follow-up with a letter telling them they've been pre-approved to get 1/3 of their money back.
+18 Billion
This is the best idea I've heard in a long time.
I just came all over myself.
Touche! Don't forget the "I can change my mind anytime I want" disclaimer.
Don't forget the fine print: Introductory rate of 0.00% APR. If the bank doesn't lock in your 1/3 repayment offer within 30 days, the rate jumps to -29.99%.
I read this a couple times before it sunk in. Hilarious! -29.99%! Shit how long till they owe you??? Same logic. Just as legit!
Great line Daedal!
Have you noticed that ATM fees have gone up (3.00?) and the banks have a ridiculous 10% difference between buy and sell on currency rates.
It really is out of control on top of our 0% interest return on our deposits.
A pound of flesh indeed.
Thas hilarious
Excellent move delacroix. Hold out till 10%. What's the rush? As far as I am concerned none of the TARP credit card assholes are getting a single cent out of me as long as I am alive.
Citi Sucks!
This is why my wife and I do not have any credit cards, from any bank.
And never will.
Fuck em!
this part of the grand financial conspiracy started in about 1965. buy now, pay later and has been a burden on amerikans for a very long time. what you do is live within your means. most amerikans do not understand this logic.
I have the 29.99% myself. Chase recently bumped up to 22.99%. All this despite an excellent credit score. All of the major banking institutions can rest assured that they well never see a another penny from me. I'm done. Smaller local banks from here on out, PERIOD
All the credit card companies are losing a ton of money this year and next from credit losses. High rates are part of the equation of losing less money (as is dropping marginal credit risk customers). Less money lost is less support needed from the taxpayers and a quicker exit/payback of government money. So to those carrying balances on your cards and paying high or higher rates, thanks for saving 50% of us some tax dollars.
In S.D, there is no limit on interest rate charged. I have citi cc and I also have my Mtg and my bank accounts with them as well. So far I haven't got my $26K CC limit slashed or got a letter regarding changes to my rate.
Bruce,
If you had just failed to pay a few times and coughed up $39 for late fees they would've let you slide. But sadly they are alienating their best clients who pay on time and in full every month. Who runs a business that way??
They don't consider clients who pay on time in full every month to be their best clients. In fact, they have a name for clients who pay on time in full every month.
That name is "deadbeat".
[They don't consider clients who pay on time in full every month to be their best clients. In fact, they have a name for clients who pay on time in full every month.
That name is "deadbeat".]
I'm not sure that's actually the case any longer.
When the economy was in non-swirling around the toilet bowl-mode, people who Paid In Full (PIF) every month
*might* have been considered more trouble than they were worth by the card companies as far as the cost of maintaining their account, providing them with customer service, etc. vs. the business they would bring in (i.e. interchange fees and nothing else). The PIFers were, of course, compared to the (typical?) dickheads who would max out/nearly max out the card, and then be on the hook for all kinds of interest and fees.
In Q3 2009, however, I think the card companies have woken up and realized that getting part of something is better than getting all of nothing. And the card companies just might be starting to prize people who PIF because 1) the percentage of people defaulting on their cards is sky-high right now and 2) those interchange fees that PIFers generate is revenue that is entirely risk-free (as compared to their wringing their hands while they wait to find out if Joe Cardholder is going to default on his thumping great balance or not).
Sure, in the days when defaults on credit card debt were low, the card companies might have held their PIF customers in some contempt. Now, however, I don't believe they can afford to. At least, that's my own (likely) childish and naïve take on all this.
That said, this 30% interest rate thing sounds like an attempt to cash in on stupid people, plain and simple. Seriously, I think Citi is doing nothing more than relying on people not reading/not being able to read those notification letters, then cashing in on the New and Improved interest rate.
This "deadbeat" closed his CITI and BAC cards last month after ten years... when he got the letters of rape and pillage from said offenders,without a coupon for a free sample of soothing vasoline. This deadbeat never had a late payment. They may not have made any interest on me....but now they wont get the merchant discount revenue or fees either.
Ken Lewis. Next question.
PS get rid of the bar codes they contain your entire life's history
"I have borrowed from them and paid them back a number of times."
Bruce the problem is that they don't respect weakness.
Hahaha...EXACTLY! Stop paying them and THEN they come BEGGING.
no, that is incorrect. citibank will not come begging, but they will come suing....:)
Actually no, they won't. According to their own terms, they will come bindingly arbitrating.
Actually no, they won't. According to their own terms, they will come bindingly arbitrating.