New Citi rates: Should you opt out?
Customers who haven't had a rate increase in two years can look forward to one now.
"Brainy Smurf" was pretty well gloating when MoneyMateKate announced that Citibank is upping her credit card interest rate. "I kinda selfishly thought to myself, 'Wow, sucks to be her,'" he wrote at Pants in a Can.
Then he got his own letter from Citi. As of today, his APR is jumping from 9.96% to at least 16.99% (and 29.99% if a payment is late). What's up? He pays in full every month and he's never late. And didn't Citigroup just get a huge government bailout?
Millions of Citi customers have been getting a similar letter, although terms may vary. (American Express and others are also making rate and fee adjustments.) For instance, MoneyMateKate said that even though she, too, pays her Citi balance in full every month, her new APR is three percentage points higher than Brainy Smurf's. She added, "They get a bailout and we get a financial wedgie."
Citi decided it couldn't honor an earlier pledge made to Congress to no longer raise rates whenever it wanted. The New York Times reported that those Citi credit card customers who haven't had a rate increase in two years can look forward to one now. (U.S. Rep. Carolyn Maloney, D-N.Y., commented: "Banks appear to be repricing cards for economic reasons -- theirs, not their customers. Apparently a deal is only a deal when it doesn't cost the financial institution too much money.")
- Bing: Find more on Citibank
What's Brainy Smurf going to do? He's taking Citi up on the offer to opt out instead of accepting the new rates. He can use the card at the former rate until it expires, at which point the account will be closed. "Sure, they'll close your account, but I'm sorry, better credit card offers are still out there and you should look for them," he said.
"Debtmaven" got a notice too and is opting out. She wrote, "I'd been a loyal and well-paying (and debt-owing) customer for more than 12 years. Bye-bye to Citibank!"
Published Dec. 3, 2008
Copyright © 2014 Microsoft. All rights reserved.
Fundamental company data and historical chart data provided by Morningstar Inc. Real-time index quotes and delayed quotes supplied by Morningstar Inc. Quotes delayed by up to 15 minutes, except where indicated otherwise. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by Morningstar Inc.
ABOUT SMART SPENDING
LATEST BLOG POSTS
Counterfeit goods are big business, not just in the U.S., but around the world. Here's how to figure out what's authentic and what's not.
- Driver survey: Men irked by phone talkers, women by lane cutters
- 5 reasons to take the company buyout (and 5 not to)
- Tired of Fed-watching, saver? Check out these banks instead
- New software targets credit card thieves at gas pumps
- Thinking of holiday shopping? Do a reality check first
- 10 things we pay too much for
VIDEO ON MSN MONEY
BLOGS WE LIKE
MUST-SEE ON MSN
- Video: Easy DIY smoked meats at home
A charcuterie master shares his process for cold-smoking meat at home.
- Jetpacks about to go mainstream
- Weird things covered by home insurance
- Bing: 70 percent of adults report 'digital eye strain'