Little Background, 20 yr Citi Card Holder Plus 760 Credit Score, Plus 20K Card Limit, 5K Balance Never Been Late. Only other c card I have is an Amex, No change in card usage, credit score, employment, income, payment history etc.

So I get this letter from Citi in the mail today. " To contnue to provide our customers with access to credit, we have had to adjust our pricing" In a nutsell my rate is raised from 9.99 to 29.99% Gives me 60 days to opt out of this change. If I opt out card will be closed at next annual renewal date.
Has some teaser offer about a cash back interest rebate of 10% of the interest charge each month

Back of the letter has the disclosure info, I am such a good and long term customer I get to borrow from them at Prime plus 26.74%.

I know this comes from the credit card reform that is taking place and the credit card companies have a certian timeframe before that comes into effect. Citi is doing this to good customers like me, what a joke and the deeper question is how many millions of folks in the country who are struggling will put more on the edge.

I assume Cap One, HSBC, Chase etc will all follow suit, nice work congress, why allow such a crappy loophole in the legislation.

Bye Bye Citi, my check for the full balance will be in the mail on Monday

Yea I have gotten similar letters regarding my credit card and credit line with Wells Fargo as well as my credit card with Emigrant Direct.

Couple things I don't get. Do you pay off full every month? Why not? Regardless, why not keep it and pay off in full every month now?

I think they agreed to lend to you only for a certain period. If they don't want to lend to you after that it's there choice, right? Is offering 29% worse than not offering anything?

My point was congress passed credit card reform with a gigantic loophole, with the banks taking advantage of it, after getting billions in TARP funds. There are a lot of people and businesses using credit cards to finance themselves. I am fortunate and do not. Assuming all the c c companies unilaterally raise everyones rates, legislation is worthless and the all ready troubled consumers and small companies are in deeper trouble.

Just close the card and pay off at the 10% rate. The same thing happened to me with several of my cards even though I have an excellent credit history. If they want to lose me as a customer, that's their loss. I soon will not have any credit card debt anyways.

I don't understand the confusion over the fact that credit card companies are raising rates on people preemptively. It was the obvious and inevitable consequence of making it harder for them to price for risk with the new legislation.

It's obviously stupid for them to do it to good customers with good credit, but probably they're sending out millions of these letters right now. If what you wrote is all true, you could probably even keep your current rate just by calling them up and complaining.

+1

I've been credit card debt free since January 30, 2009. Closed all of them and haven't looked back since. Paying with cash transfers the power back to the consumer and out of the hands of these big, customer-raping banks.

I've been getting these for all my cards as well. I've been carried a balance and never plan too though... I don't really care about the APR. Cuts to rewards programs suck though.

What would you guys suggest for somebody who has 2k on a card and recently received on of these letters? Paying it off would be hard to do right now, but my wife has OK (650ish) credit.

To the OPer, if your credit situation is rosy, why don't you have an overdraft or other facility with your banking institution to ensure full monthly payment of your credit card? For the credit card issuers to move away from long term facilities back to their original function, short term credit extensions, is prudent. They are in, for all intents and purposes, the unsecured signature loans business.

Pay it off or switch banks or opt out.

Imagine if we let these banks fail....I bet new/better business model banks would of taken their place?

I know I'm loving my community banks.

Can't you just cancel the card and pay it off under the old terms? Or are they not even letting you do that? There's no law (yet) that says they have to. That's what's really scary. In theory they could raise your rates to 1000% and not let you even pay it off under the old terms.

This is purely just a capital-grab by Citibank, which shows how mismanaged they are that they need to cannibalize customers right now for a quick payday.

Sounds like you're not having a real issue paying off the balance in full. Since that seems like the case, why carry a balance at all?

With the national debt increasing at 15% per year. Banks need to charge 20% to break even. Those who fail to pay their bills should be jailed. People that use credit cards should stop using credit cards. They should add 3 years of jail time if you declare bankruptcy or get foreclosed on. Tired of treating deadbeats like heroes. They should increase income taxes to 30% (no deductions). Balance the budget.

Are you the prince of dubai?

So if someone uninsured gets really sick, can't pay, they go to jail? I guess all these new prisons that will need to be built will stimulate the economy.

Troll.

Probably doesn't realize debt has financed every single corporation (or almost) and that sometimes people/corporations go Ch.11 and default? That's why there's a profit margin on interest rates... otherwise we'd all get lending at the risk-free rate...

I went through this with citi back in January. After calling multiple time to try and fight the rate increase I wound up talking to customer service rep on the phone who told me to just opt out of the increase and call a few months before the card expires and negotiate another rate at a later time. She told me that if they closed all of their good account holders accounts they would have no business in the end and that they will work with me when the time comes.

Because of tough economic times and to ensure business stability Citibank was forced to raise my rate from 8.99% to 19.99%, I opted out.

A week later, my wife (under her maiden name) receives a letter in the mail offering her 0% interest for 6 months and then 8.99%. [censored] Citibank, stay with your local community bank or credit union.

So what happened?

We just got the letter as well. I read through it several times because it almost didn't seem possible - I thought you needed to be in the mob to charge that kind of interest rate. I've been a cardholder with them for more than 30 years, both my wife and I have credit scores > 800, we typically pay the bill off every month and, not that we ever get anywhere remotely near it, have a card limit above $40k.

I think I will give Citibank 30 days to "opt out" of this interest rate hike.

DOES NOT FOLLOW

I came in here to post the exact same thing. I was laying in bed and just thought about it.

You go to the bank and rob $10,000 you go to jail. If you put $10,000 on your credit cards and decide not to pay it back you should go to jail. As for health care it should be free. However, it is not since the health care industry owns government. Thus, it is a bill like a boat.

When a stock defaults on their loans the debt holders own the business. Thats how Eddie Lampert got Kmart.

And a business that defaults with negative equity, no cash and a losing business is worth having? You need a risk premium above the risk free rate just to cover the risk of lending to someone.

Do you understand what unsecured credit it? Or why the interest rate on credit cards is higher than the interest rate on a mortgage?

Similar things are true, as it were, for types of bonds.

What happened was I opted out of the interest rate increase. I carry a balance on my card and I am locked in at 7.9%(actually down to 5.9% right now). I can still use my account and supposedly the card will shut down once the expiration date approaches (10/2011). Probably around August of 2011 once the balance is close to zero I will call them up and negotiate other rate term like the csr told me to do. At that point in time I won't give 2 ****s if they allow me to keep the account or not because once I am done paying this bitch off I will never again use another credit card in my life. I haven't touched this one in over a year or so.