just gave citibank the axe

[sleddogg]

my most recent Sears Mastercard bill came last week and included an "Open letter from Sears to our Customers", thanking me for my business and stating that due to these difficult times Citibank has informed them that they are making some changes to many of it's financial products including Sears Mastercard. Also included was a leaflet notifying me of said changes, my right to opt out and other terms of service. Net result...goes from 16.58 to 23.99 percent. When I got the card 5 yrs ago it was at 14.99%. I used it a couple of times to take advantage of Craftsman deals and would pay it off before paying any interest. Made a major purchase last august, 0% for 12 months. Have never missed or late paid anything, anywhere whatsoever ever, credit rating is pristine except for recently using more of my credit on other cards than ever before (equipping shop, finishing basement).

So I paid off Sears Mastercard, called them to cancel card (not opt out), told them not to ever send me anything or my family anything ever and that they haven't heard the last of me. I am presently composing an editorial letter asking Citibank how they would like it if they got an "open letter from the United States Federal Treasury" telling them that the taxpayers of the United states are changing the terms of the 45 billion dollar loan that we gave them and are now charging them 29.99 percent interest. Of course they can "opt out" at which time we will close the account and they will have to pay immediatley under current terms. I will send this editorial out to major cities newspapers and with any luck AP will get ahold of it and sweep the nation.
If they didn't owe us so much money I'd love to see them tank. I know they are strong arming customers so they either cough up some extra interest, or just pay it off like I did so they can generate some cash fast. I think my state representative needs a phone call too!

End Rant.

[LinuxRandal]

Is the percentage that important, if you pay it off every month?

[tommyt654]

Way to go sledogg, I agree with you and will be checking the papers. Apparently some people just don,t get it. It,s the principle not the interest rate.Duh

[crokett]

Is the percentage that important, if you pay it off every month?

No but that's not really the point. I had a card years ago that I never really used. I carried for emergencies. They sent me a letter saying my rate was going from 11 to 22%. I called and closed the account.

[Stytooner]

I think they are betting that folks need the card. Some will opt out of course, but most will ignore it. That is what they are betting on.
The worst part is that these people are the ones that can least afford such an increase. They may have maxed the cards out already and are just making minimum payment. They should be paying more surely or else they are just treading water. Now with an increased minimum, many will have to default. This will result in higher cash flow for the CC company, but will put many in bad credit. The CC company will have to spend more on collections too.
Kind of a vicious cycle that really slams those that are paycheck to paycheck.

LOML and I watch our interest rates pretty closely.
When we do need to carry a balance for any length of time, we always use our lowest rate cards.
If someone is going to double my interest rate, they will shortly be loosing a customer. I'm no stranger to "if I don't have the cash, I don't need it." way of living. Not a problem for me.

[Ed62]

Can they legally raise the interest rate on items already purchased, or does it only apply to future purchases? Either way, I wouldn't be doing business with them either.

Ed

[jackellis]

Citi and every other bank can do pretty much what it wants if they've sent you a notice with any changes in terms. I suspect the reason they're raising interest rates is because there have been so many delinquent and deadbeat accounts.

We treat credit cards like cash management tools and pay the balances off every month. If I could, I would prepay mine by a couple hundred dollars just to avoid the possibility of a late payment since the interest rates are so onerous. However, I'm not going to stop using them.

[DaveS]

Keep in mind that canceling a credit card (temporarily) lowers your credit rating.

What I do with these "good cards gone bad" is to stick them in a drawer and forget I have them.

[430752]

Agreed with the dumb move by them and the retort! Notgonnahappen.com, but nice sentiment. They do have a good response, though, which is the credit rate charged is supposed to reflect their "gamble" on your not paying, and thus, with general raise in defualts and foreclosures, they need to raise the rate to offset increased risks.

Just to play devil's advocate. Of course, I cancelled my CC when another company did the same thing to me. They actually said they would reinstate my rate, I told them to stick it and was cancelling anyway due to their shenanigans. I think America would be a lot better off if we all cancelled our credit cards and paid cash, check, amex for everything. Usury (the old kind) used to be an evil thing, maybe we'll finally get back to those days?

[Ed62]

Keep in mind that canceling a credit card (temporarily) lowers your credit rating.

Our credit rating is very good, but if they think I'll be held hostage because I cancel one, it ain't gonna happen. I have most of what I want, and all of what I need. So if they lower my score a little, I doubt very much it would even affect our insurance rates (which many times reflect your score).

Ed

[Hellrazor]

It is so nice to see the banks giving us nothing to 3% interest and charge us 20+% in return.

[BrazosJake]

I did a very brief tour with Citi a couple years back (I'm an IT pro). After seeing their operation from the inside, I immediately closed my HD account (another Citi partner).

[kbkreisler]

Funny how the cc companies take advantage of consumers as soon as the winds change. I cannot imagine the impact this will have on people with multiple 'maxed out' cards teetering on the edge of forclosure. we had some wamu lines of credit that just jumped from 11% to 30% apr months after aquired by jp Morgan. account always managed responsibly, never a late payment.
they are just going to dig this hole they created with greedy mortgage lending deeper.
After paying my holiday balance down I intend to close these accounts, I will also remember the Loyalty these banks are showing after the taxpayer bailout of the financial sector to keep them afloat.

[Hellrazor]

Step 1. Bad economy and a lot of defaults on payments
Step 2. Raise rates to makeup for money lost on the defaults
Step 3. More defaults because the rates went up
Step 4. Raise the rates again
Step 5. More people default

*sigh*

[RAFlorida]

Sleddog, most of us back you on your

thoughts and planned editorial. Nothing I can add because others said it better than I could have. Sometimes I wish there was a partition that could be signed and sent to Washington, the banks, etc. But that's wishful dreaming.