January 04
Thank you from Citi: We are increasing your interest rate.
I just got off the phone with Citi. I believe, like all Americans, I helped bail them out from their poor management choices during the onset of the recession. I received my thank you from them stating my interest rate was going to be raised to 20.99%.

These interest rate increases verge on the immoral. They are well above operating costs. They are targeted at good customers who will pay their bills. We are being asked to finance the misfortune of others, the bank and their defaulting customers, not only through our taxes, but through high interest rates and fees to the banks.

After negotiating, I was able to take it down to 18.99%. Still almost 2 points higher than the average reward credit card rate. I acknowledge the good customer service from Tim with whom I spoke. It isn’t his company any more than it is mine I guess. He just works their and I am a minor creditor. Glad he still has a job, but feel for him as he hears from frustrated customers all day. I’m sure he doesn’t get any reasonable compensation for the pain his employer is putting him through.

Well, this card is on the chopping block and will be paid down rapidly. I will miss my American Airline miles, which I was willing to pay a bit more for, but not this much more. Too bad the co-branding partners aren’t stepping in because this type of negative customer experience reflects on them as well.

Some complain about the US becoming a nanny state. Despite congressional action already underway, average consumers need to be protected by these excesses now. If the big banks can’t make money the old fashioned way, then they should be allowed to fail. There isn’t enough value for me to do business with them anymore. Scale was once seen as a way of driving down costs, but it is a way of driving up complexity and creating market systems that fail to serve consumers, employees and the shareholders.

Maybe its time to get credit through a Chinese bank and cut out the middle man.

This could negatively impact your credit score, though not as much as it would have if you carried a large balance. However, if you have two cards, one with a $5,000 balance and a $10,000 limit and your closed card had a $10,000 limit, your credit utilization ratio would jump from 25% to 50%, which could negatively impact your score.

Also, if the card that was closed was one of your oldest accounts, that could impact the score negatively by shortening your credit history. Unfortunately, there’s little that can be done, though I am appalled that you were told you were flagged just because you called into complain. That is absurd.

They aren’t getting another cent of my money. Nice job, Merrick!