15 million Citibank card holders will pay more, bank evading Fed's rules
Filed under: Banks, Borrowing, Credit
Got a Citibank credit card, or any one of the co-branded cards, including Sears and MySpace, among many others? You may have hoped you'd be safe from unreasonable rate hikes thanks to new Federal constraints on banks' ability to raise rates for borrowers. But those laws don't go into effect until February 2010, and for Citibank, there's no time like the present.According to the Financial Times, Citibank has already raised rates for you -- and you -- and you!
As many as 15 million U.S. card accounts in total. And the increases are big. A Credit Suisse analysis of the past several months' data indicates that rates were up an average of 24% between January and April of this year. That represents a three percentage point increase for those who don't pay their balance in full each month. For instance, if your rates were 10% before, now they're 13%; this would represent about a $200 difference in the amount of interest you'd pay in a year on a $5,000 balance.
Citigroup, in response to the report, released a statement, saying "We have adjusted pricing and card terms for some customers as part of our regular account reviews. This is an ongoing process to ensure we offer terms, interest rates, credit lines and products based on individual needs and risk profiles. These changes also reflect the dramatically higher cost of doing business in our industry as we work to preserve the broad availability of credit."
Really? Regular account reviews? This is corporate profit protection, plain and simple, an enormous bank on the verge of becoming property of the U.S. government, taking out its neediness on the American cardholder -- who is locked into the marriage by the virtue of unemployment and other financial woes. It's a co-dependent relationship with a financially abusive partner, and we're the unhappy, credit-bruised enablers. Citigroup has raised rates further than other banks, and the Financial Times adroitly writes, it's a "move that could fuel political anger at the treatment of consumers by bailed-out banks."
Could, will, did. Are you angry, too?
Reader Comments (Page 1 of 6)
7-01-2009 @ 3:14PM
Ken Siemers Sr. said...
This is great. Now everybody can reward the bank for doing a bad job loaning money. If I had a card with these bums, I'd terminate it and if I had other accounts with them, I'd dump them too. This whole mess is a travisty................
Reply
7-01-2009 @ 8:02PM
sidney said...
I lost my job a few months ago, as many of us are now. I was devastated, how was I going to support my family? I read about the eBay Success System in Entrepreneur magazine and they even had a link ( http://tr.im/EbaySuccessSystem ) to get a free kit explaining how to make money that way. I found out that over 720,000 Americans are making a living on EBAY right now. I am one of them now. Now you can do that too. I can tell you that I'm already making as much money as I did on my job and I'm working less time than I used to spend commuting. Beat the economic depression and get your free kit today. http://tr.im/EbaySuccessSystem
7-01-2009 @ 3:20PM
Cashed Out said...
They need to raise rates to pay those big bonuses to all of that good talent they have running the bank into the ground.
Reply
7-01-2009 @ 3:22PM
d said...
Capitalone credit card already increased their rates and I closed both accounts i had with them.
I can live without credit cards that charge you in every way they can (most which seem like they should be 'illegal').
Get a prepaid or use a debit or save and buy it.........
If people didn't give them all that $$$ they wouldn't be doing what they are to people!!!
Reply
7-01-2009 @ 3:28PM
bikerchick said...
I had a credit c ard with Sears for over 25 years. I received a notice from them stating they were going to raise my interest rate 10 pts "because we can" Of course they stated the new catchphrase "Due to the economy" I closed the account so I could keep paying the same interest rate I had been paying. Guess what? They turned around and raised it the next month anyway. I will not rest until I pay that card off.
Reply
7-01-2009 @ 3:29PM
helen said...
don't cancel your cards. I just paid all of mine off and subsequently shredded them all. If you cancel them you are left with no available credit and a higher credit score. I kept one card for emergencies only. Hopefully the rate on that card won't be too high but I don't plan on using it anyway.
Reply
7-01-2009 @ 3:37PM
Sandra said...
I use to burn my bra. Looks like we shall not burn our credit cards so those high paid executives can't take their expensive trips anymore and have the government bail them out.
Men/Women ...toss out your credit cards ..burn them!
Reply
7-01-2009 @ 3:37PM
Linda M said...
How about a class action suit for unethical practices and cheating the public. I have written the president and my congressman about the unscrupulous practices of these credit card companies and they have acted, but July 2010 is to late. I think they should make them all drop their rates to the original rate offered on the cards.
It is amazing we have been put in this position and congress has not acted sooner to protect the public. Another thought would be to check their profits and cut it in half as a rebate to the people they are robbing. Not only is it our money that bailed them out, now they are robbing us again by increasing rates and lowering our credit without reason.
Reply
7-01-2009 @ 3:39PM
Credit Man said...
Cut up all, except one credit card, and only use that for an emergency. It's about time, we the public show the banks to go screw themselves and not screw us anymore. I just did a good job cutting them up (except l) ..try it ...
Reply
7-01-2009 @ 3:38PM
jim said...
cancelling your credit cards is a bad idea. Bring the balance to zero and don't use them, otherwise your credit score will go down by closing available credit lines.
Reply
7-01-2009 @ 3:43PM
Jerry said...
Bye bye to my cards. If you want something bad enough, don't buy it unless you have cash to pay for it!!! End of story!!!
Reply
7-01-2009 @ 3:44PM
Alli said...
I had a card with 3.99% with Chase for the life of a balance transfer. I received a letter stating that they were going to raise my rate to 24.99% the only way around it was to cancel the account. How is that legal? I know it's not ethical, why should I be penalized for paying my bills on time?!? Something is very wrong here. I'm still trying to figure out what these bailouts accomplished. The economy still sucks and with obscene rate hikes like this they are only going to push more people towards financial troubles. I hate that I have credit card debt but I am working really hard to pay it off. Why make it harder?!
Reply
7-01-2009 @ 3:44PM
Pete said...
Can't screw us any more as we just screwed you by cutting up our cards. Sorry you can't receive those executive salaries at the banks anymore ...Screw us, we screw you back ...
Reply
7-01-2009 @ 4:05PM
Babs said...
Up yours to all banks. That is where we would have loved to put our credit cards, but put them in our fireplace to burn. Even if's it 90 degrees here, we burn a fire to burn all cards.
Reply
7-01-2009 @ 3:54PM
Tom said...
Just got a notice from American Express that they cancelled my account because I haven't used it for 24 months. Boo hoo!
Reply
7-01-2009 @ 3:56PM
Kathy said...
Not only are they upping the interest rate they are trippling the minimum payments. Ours went from 2% to 5% and then they say they will reduce if you accept a 25% interest rate!!! They are forcing people to basically default so they can ask for MORE bail out money from the government.
Reply
7-01-2009 @ 4:00PM
lynn said...
it's time we americans start keeping our money in our own pockets and out of the pockets of CROOKS, LIARS AND THIEVES. STOP USING CREDIT CARDS!!!!!
Reply
7-02-2009 @ 2:56PM
richard said...
Don't pay!!!!!!!!!!!were going to be had one way of the other.BB&T '''''''' YOUR BANK WILL ALWAYS BE GARBAGE!!!!Hope you fold and never recover..A loyal bank member for 6years...BB&T YOUR GARBAGE!!!!!!
Reply
7-01-2009 @ 4:06PM
lynn said...
GOOD FOR YOU PETE. IF WE ALL STOP USING CREDIT CARDS AND START PAYING FOR WHAT WE CAN AFFORD OR NEED EVENTUALLY WE WILL TEACH THESE CREDT CARD THIEVES A LESSON.
Reply
7-01-2009 @ 4:16PM
Thomas said...
Alli -See a lawyer for advice. Since You have a contract for a lower rate and could sue the bank for breaking this contract. Call a public defender at no cost. Write to ABC "On Your Side" for answers. Check with the Better Business ..
Reply