Michelle Malkin » Citibank tells cardholders to take a hike

Citibank tells cardholders to take a hike

By Michelle Malkin • November 26, 2008 10:33 AM

(Thanks to BT for the photoshop.)

Terrific: Bailouts for Citibank, rate hikes for their cardholders.

Reader Elizabeth e-mails:

Dear Michelle,

I have been a Citibank cardholder since 2002. I have a better than average credit score and a perfect payment history with Citibank. My current APR on my Citibank credit card is 7.99%. Yesterday, the same day I find out Citibank is receiving $25 billion in bailout cash from our tax dollars, I received a notice with my billing statement stating my APR would nearly double to 14.99%. The notice also said I would be given the chance to opt out of the rate increase and keep my current rate until my card expires, at which point my account would be closed, and I could pay off the balance at my current rate. When I called to opt out, a Citibank representative assured me that I did not have any problems with my account that would have prompted a rate increase and read me a canned message about the “current economic crisis” and how Citibank would otherwise be “unable to keep its doors open” if it doesn’t increase its cost of extending credit. It is my understanding that last week, Citibank told the Wall Street Journal it would be raising APR rates 3% on average and the rate increase would affect about 20% of Citibank cardholders. Sure. My fiance also received the same notice despite his high credit score. When he called Citibank, he was given the same canned speech.

A blogger who had the same experience is calling Citibank out.

Posted in: Subprime crisis

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#558913

On November 28th, 2008 at 12:24 pm, Stillwaiting said:

ammo john,

My new gov’t travel card is with JPMorgan Chase. My old card (that expires on the 29th) was from Citibank. Maybe the system allows for the use of different vendors by different agencies.
#559308

On November 29th, 2008 at 2:28 pm, corkie said:

On November 26th, 2008 at 11:41 pm, robert537 said:

#20: Corkie – I think a case can be made to freeze or cap interest rates and service charges on accounts that are current (especially when the banks are lining up to pick our pockets).

When someone is on the edge (like more and more people), the last thing one needs is to have the banks piling on to make your situation worse. It doesn’t make business sense to me to hinder a debtor’s ability to repay a debt.

A socialist can make such a case rather well.
#559452

On November 30th, 2008 at 12:01 am, shynes said:

This is timely. I got a letter from Washington Mutual closing my account for non-use. I really didn’t use the account but would log on from time to time to check my FICA score (which the acct displayed for me!) This will hurt my credit score because my debt/avail credit ration will go way up because I will lose $15,000 in available credit. Kind of a bummer, and they gave me NO warning, otherwise I would have charged something on it!