Even as Citi manages to get a bailout from the government, the company still plans to boost interest rates on credit cards. Even as there is talk of a Fed rate heading toward 0%, credit card companies are trying to wring whatever they can out of people before the economy forces a higher rate of default.
And Citi is right up there. Even as news of the bailout is beginning to filter through into the public consciousness, people are finding notices in their mailboxes that Citi plans to raise interest rates. For those who pay off their balances every month, the news isn’t such a big deal. For most people who carry a balance, though, higher interest rates mean two things:
- Larger minimum payment each month.
- More of the payment goes to interest, meaning that credit cards are paid off much more slowly.
Will the American public be so numb to further bailouts to be upset over the current help for Citi? Or will they demand some sort of justice? After all, it’s taxpayer money on the line for Citi. Does Citi really need to institute what amounts to another tax?
November 26, 2008 at 1:38 am
It’s past time to spank Citibank!
I have held a Citi credit card for over 26 years. I also have other Citi business relationships. Today I received notice of an interest rate increase on my primary Citi credit card. This will be the highest purchase interest rate of any credit card that I carry. (I do not carry a balance, by the way. This is a matter of principle.) I opted out. Tomorrow I intend to call Smith Barney and discuss my relationship with them. Disconnected management on this monumental scale should not be eligible for Federal (read us) bailout money. Vikram Pandit may not be entirely responisble for Citibank’s sorry state but he is presiding over inexplicably incompetent management. Well managed regional banks want our business. We cannot stop the Feds but we can move our money to people who appreciate us as customers.
November 26, 2008 at 4:26 pm
So true. We need to do our part as responsible consumers and put our money where we are benefited. It is time for us to look out for our financial interests, because the government and the companies are looking out for corporate interest.
December 1, 2008 at 2:54 pm
[...] the TARP program is all about encouraging increased consumer debt. Credit card rates are falling (everywhere but Citi). And people have been saying that it’s “patriotic” to spend money in order to [...]
December 2, 2008 at 10:01 am
It’s true…100%….We should think of our benefit by this also.
December 6, 2008 at 11:29 pm
Citi CEO Vikram Pandit will address employees today about the bank’s reduction in workforce, reports CNBC’s Charlie Gasp… G20 Plan Enough? As world leaders at the G20 meeting agree on further coordinated action in an attempt
December 9, 2008 at 10:52 pm
Has anyone heard anything new regarding this subject (Citi raising rates after receiving bailout funds)? I have been searching every day to see if there has been any attention given to this issue.
I heard that CNN was going to do a report on this, but have not been able to find anything.
And yes, I have already called my state representatives. Enough is enough. I have stayed quiet too long. We have to find a way to fight back!
December 11, 2008 at 4:28 pm
I’ve not seen anything really new on it. I think Congress is more worried about other things. But, really, credit card reform should be implemented. Credit card companies should be required to have some sort of standards before doing this sort of thing. Current agreements allow card companies to be rather capricious.
December 12, 2008 at 3:41 pm
[...] generous bailout by making sure executives get their bonuses and by jacking up interest rates on credit cards. But they’ve got their money, while the auto industry is on the verge of failure — and [...]
December 18, 2008 at 5:29 pm
[...] rates changed on a whim, for no apparent reason. (Citi is a prime example of [...]
December 31, 2008 at 11:46 pm
[...] for the New Year with regard to credit, including the fact that some credit card companies (like Citi) are increasing interest rates and that FICO is rolling out a new credit score formula. And, of [...]
March 4, 2009 at 2:26 am
3-3-09
In response to Lisa’s comment (12/9/08:
My husband & I have had a Citibank card for
30 years with an excellent payment history and high credit score. We have had a 0% interest for a couple of years.
A few months ago we received an opt out letter stating that if we didn’t agree to their terms of higher interest, that Citibank would cancel our card at the card’s exiration date of 2010. We would coninue to get 0% interest until 4/09 and then the rate would go to 6.99 until the card expired. My husband & I were concerned that if the economy didn’t turn around that we may need the Citibank card, so we agreed to their terms.
I called Citibank today (3-3-09) and the customer service rep stated that after 4/09, our rate of interest would go to 8.99.
He also stated to call closer to 4/09 and ask to get a better rate of interest.
I have read on various websites that Citibank is doing this to many customers that agreed to their terms.
I think there should be a petition for customers to sign and send to the CEO’s of Citibank. Maybe if they received thousands of names, they would have a different outlook. Bailing these banks out was a waste of time and money and it’s always the taxpayers that end up paying for their mistakes. My husband & I are both furious with Citibank’s way of doing business with loyal customers and will drop them if something better comes along.