Editor’s Note: At the time of publication, Citi had only raised rates on a few store branded credit cards. For information on the current Citibank credit card interest rate increases, see this article.
Much has been made today about Citibank raising interest rates on consumers. However, it appears the increases are only tied to co-branded store credit cards issued with Macy’s and Sears. According to reports, the interest rate increases average 3%. The media, however, has turned this into a headline story when, compared to the actions of other banks, this is a rather small increase.
Late last week, Chase raised minimum payments for some consumers by 150%, from 2% of the balance to 5% of the balance. This has put many consumers on the brink of default, as once manageable payments have ballooned into mortgage sized responsibilities.
Similarly, Chase, Capital One, and a wide array of other banks have been sharply increasing interest rates on broad swaths of consumers with solid credit histories.
Perhaps the fact that Citibank is a semi-nationalized bank is causing this big uproar. But ultimately, Citibank’s decision to raise rates on already high interest store credit cards people should not have been carrying balances on in the first place is one of the least newsworthy credit card headlines of the past six months.
July 1st, 2009 at 10:13 pm
thank Chase, I will just get it over with and kill myself.
p.s. thanks again Chase for the interest [expletive deleted] hike.
July 2nd, 2009 at 11:08 am
Brian,
I am really sorry to hear that you have been put in a bad situation and truly hope you are just being dramatic with your posting. There is more to life than a good credit score. Please hang in there.
July 5th, 2009 at 5:09 pm
Chase increased the minimum payment on 3 of mine and my husband’s accounts. However, we were lucky enough to pay off 2 of them which was enough to offset the increased minimum on the one we have not payed off. We hated depleting two-thirds of our savings to do this since we were planning on starting a family within the next year and a half (I’m 34-biological clock is ticking) but we felt we had no choice since the extra $600.00 in minimum payments on those 2 cards we payed off would’ve had to come out of our savings anyway.
I think this is a despicable move by Chase. They are forcing people to make tough decisions like we have, and others that don’t have the savings to pay their Chase cards off or switch their balance(s) to another credit card may be forced into bankruptcy because they simply don’t have the money to make the almost triple minimum payment now required by Chase.
There’s still hope for people that absolutely can not make the minimum payment. I have been reading on other blogs/websites where people were able to get Chase to restructure their loans/balance transfers by being transferred to the hardship department. People are getting 5 year payoff plans at the regular 2% minimum payment at 2-6% interest rates depending on what you qualify for. People need to tell Chase that they can not make the 5% minimum payment and will be forced into bankruptcy. Just say to them “Would you rather I file bankruptcy?” after they tell you there is no opt out, and they will transfer you to the hardship department.
Although, I don’t think this is right thing for Chase to force people to do because people are making payments fine at the 2% minimum payment rate. All Chase would need to do is just let people close their accounts at the current 2% minimum payment terms and pay them off. Most people’s balances would be payed off in 5 years anyway since their interest rate is so low (most of the payment is going toward the principle). But, anyway, there’s no need for people to give up-don’t let Chase get to you, they’re not worth it! Just ask to be transferred to the hardship department, and Chase will work out a payoff plan where you’ll be paying the low minimum payment you’re currently paying! It’ll be OK!
Chase is obviously just trying to get these large low interest balances off their books so they can loan the money out to new people at higher rates. They’re only thinking of themselves. As I was told by a Chase representative, “It’s a business decision.”
July 17th, 2009 at 6:24 pm
I have been a Citibank cardholder for 19 years. NEVER an issue. NEVER late. Got a letter today 12.8% rate going to 30%. Just like that. A good company? Think again.
July 18th, 2009 at 9:12 pm
Today, we received a letter from Citibank, stating that their minimum interest rate was increasing to 29.99% APR.
They did state we could close our account and keep our current rates as we continue to payoff the balance. But I am sure that there is fine print that states, if they have a bad day they increase those rates too…….
The government is about to put the screws to the credit card companies, therefore they are putting the screws to us first!
July 19th, 2009 at 6:12 pm
Citibank raised my interest rate from 19.99% to 29.99%. That is more than “a little”. That is a whole 10% on an already very high interest rate. I had to opt out because I cannot afford the payment at the higher interest rate. So now my credit score will take a hit due to the closure of a $2700 credit card limit. This makes me so friggin mad. I have paid on time and held this card for 11 years. I am done with credit cards. I will remember the companies that screwed me over when I needed them.
July 20th, 2009 at 9:30 am
Cancel that account asap. If you miss a payment or bounce a check, they can probably raise the rate again. But no one should be paying 29.99%. Its inhumane.
July 20th, 2009 at 9:32 am
It seems Citibank has starting raising rates, as a lot of complaints just pored in this weekend. Opting out is only option here, though I would recommend opening a new account with a different credit card company to help out your credit score and give you access to credit.
July 21st, 2009 at 5:12 am
Whoever wrote this article is an idiot. My interest rate just shot from 9.9% to 29.9% with the option to opt out. I considering opting out of paying them too. I’m in such a bad position already, they couldn’t get anything out of me if they tried.
July 21st, 2009 at 3:24 pm
I am in fact the idiot who wrote this. At the time, Citi was rasing rates on a very limited number of cards and on a small number of offers. I have just begun hearing complaints from people that are similar to yours.
July 21st, 2009 at 3:48 pm
[...] Citibank Raises Credit Card Rates – But Not That Much Recent Comments [...]
July 21st, 2009 at 8:36 pm
Talk about GREED. They shouldn’t be able to raise your rate more than 2% a year.. unless you default. I am not going to do business with them again.
July 22nd, 2009 at 12:55 pm
Citibank raised my rate from 9% to 24.99% last November. I didnt opt out because I didnt want to have a high debt ratio. Today I get a letter that its going up again to 29.99% because of the “current economic climate”. What?????? expletive expletive. Did they not get a bail out? where is ours?????? And like everyone else I have never been late, my credit score is in the 700’s. I am about it tears. If I close it I lose 5200 credit line of available credit. Why doesnt the new law go into effect immediately? This just allows companies to raise rates exorbitantly before the law goes into effect!
July 22nd, 2009 at 1:04 pm
Another comment of Citibank: I am the bill payer at my office and we mailed my boss’s payment 10 days ahead of the due date from california to nevada. Guess when they posted it? A day late. Yeah, right it takes 11 days to go one state away. Yet my parents in Omaha get their mail from me to Nebraska in 3 days. I believe they are also delaying posting of mailed payments.
July 27th, 2009 at 9:07 am
Citibank is raising my rate of 10.24% to 14.99%. 9 months ago, I was notified my rate on my ATT Universal card, owned by Citi was going up 10%. I spoke to a supervisor who switched me to the Citi card with the 10.24%, still an increase by less than what they were trying to get from me. I just received the notice, as someone said due to the “current economic climate” they are changing my terms. I called and spoke to a very nasty rep, who said “take it or leave it”. I asked why, if I’m an “exlempary” cardholder – Citi’s words, I pay early if not on time, more than the minimum, they keep raising my credit line, I keep getting promotional offers from them, are they raising my apr? She said “so opt out”, which I did. This is a Citi bank card, not a retail store card, so there greed is univeersal in their company – or should I say OUR COMPANY as they have our bailout tax dollars in order to pay their obscene bonuses and have their name on a baseball field.
The government’s new bill does NOTHING for we consumers. And that it doesn’t take effect until next year, because the banks needed more time to adjust makes me puke.
October 29th, 2009 at 9:52 am
Hit them where it hurts. Cancel the card, pay it off, and never do business with them or their side companies again. Write your congressman, write yoru attorney general and let them know of their business ethics. You and I would be charged usury for these rates. After having this card over 20 years, mine was raised to 29.99% even though the libor rate is less than 0.5%(what is used to determine interest rates)So they are getting over 29.5% pure profit. After receiving billions of our tax money in bailout, they turn around and have call centers in India and the Philipines. When I couldn’t understand the malaysian, I was yelled at and told to “listen closer”. So much for the money going to stimulate OUR economy. Write letters, complain loud and long! That’s the only way this company is going to listen.
November 18th, 2009 at 2:23 pm
Not that much. In last night’s mail I got a notice that my balance was going from 10% to 19.9%. With 30 days notice.
100% increase. Naah, not that much.
November 19th, 2009 at 9:38 am
Scott,
This story was in response to an earlier increase, not the present one. You can read more about recent Citibank credit card interest rate increases in other articles.