If you want credit card horror stories, you can find them all over the Smart Balance Transfers blog.  Beginning last November, visitors started writing me with increasingly horrific tales of credit card companies gone wild.  Of all the stories I’ve heard, none have bothered me as much as the recent reports of interest rate increases by Citibank that have left what seems like millions of customers with two options:  close your credit card account or pay 29.99% interest.

Prior to the credit crunch, the majority of credit card complaints revolved around unfair penalties, most of which were clearly outlined in the terms and conditions of the affected party’s credit card contract.  During the credit crisis, the nature of these horror stories changed.  Rates were being sharply increased, credit limits were being cut, and accounts were being closed with no warning. Continue Reading »

Following an extended period of reduced introductory rates, 0% balance transfers for 12 months have become available.  However, these offers are scarce, as most credit card companies continue to offer 0% rates lasting around 6 months in advance of new credit card laws and record high consumers defaults.

A year ago, most balance transfer offers lasted 12 months, while some were good for as many as 15 months.  On top of that, many credit card companies offered fixed rates for life on balance transfers with interest rates as low as 2.9%.  The days of fixed for life balance transfers are most likely over.  During the past year, many customers who had fixed APR for life balance transfers were rudely notified that they would either have to pay 200% more every month or shift to a higher variable rate in order to maintain a lower monthly payment.

Given the high probability that low fixed balance transfer rates are unlikely to return in the near future, securing a 0% APR for 12 months on balance transfers and using that 0% period to pay down debt is clearly the best option for consumers looking to reduce debt and interest expenses.  On the average, a person with a 15% interest rate and a $10,000 credit card balance can save in excess of $1000 during 12 months with a 0% balance transfer.  With a 29.99% interest rate, such as those being forced on consumers by Citibank, the savings come to well over $2,000.

Hopefully, more credit card companies will bring back 0% offers that last more than 6 months.  Unfortunately, this is unlikely, as credit card companies continue to be very selective when reviewing credit card applications.

For more information on current 0% balance transfer offers, please see the credit card comparison section of Smart Balance Transfers by using the navigation on your left.

Senator Chris Dodd of Connecticut has proposed a freeze on credit card interest rate and fee increases ahead of the implementation of new credit card regulations due to take effect in February.  According to The New York Times, Senator Dodd’s goal is to prevent the “squeezing” of Americans.  Perhaps such a measure should have been introduced 3 months ago, while the majority of credit card issuers were raising rates on a wide range of customers.  Or, perhaps, two weeks ago, before both Wells Fargo and Citibank raised interest rates on what may be millions of Americans. 

Citibank, which recently notified many of its customers that it would be raising interest rates to 29.99%, was not mentioned as reason for this initiative, though one has to wonder if the Citi rate increase was the straw that broke the camel’s back. Continue Reading »

It has now been over a week since Citibank raised interest rates on many of its most loyal customers and it seems as if no one in the media cares.  This continues to shock me, as the number of visitors contacting me has not dwindled.  And my concern that tens of thousands of customers have overlooked these letters and tossed them in the garbage is growing by the day.

I searched Google news a few moments ago expecting to see results from the Wall Street Journal, the New York Times or USA Today.  Nothing.  And, since these are the only three papers anyone seems to read these days, that leads me to believe anyone who threw their rate increase notice in the mail will be in for a very big surprise when the new Citi interest rates take effect. Continue Reading »

Since so many of you come to Smart Balance Transfers to vent, I want to take the opportunity to do some of my own venting.  People began receiving rate increase notices this weekend.  By Monday morning, I’d heard from at least 30 people, and the number of comments continues to swell.  Increasing interest rates to 29.99% is absurd and this ought to be big news.  But its not.

So far, I’ve found little more than a Huffington Post blog article, which for some reason rejected my comment on the story, and a small blog posting on MSN.  Other than that, no major media outlet seems to be interested in the story.  Have we become so accustomed to malicious credit card practices that this massive rate increase is no longer newsworthy. 

So I tried to contact ABC news.  No luck.  Apparently, no one seems to care that the financial well-being of tens of thousands of Americans is in danger.

And that’s my vent.  I am very privileged to have the opportunity to facilitate the sharing of information on this matter via the Balance Transfers Blog, but I am also deeply, deeply disappointed in the major media players for turning a blind eye to an event that has far reaching implications for everyone who carries credit card debt.  Shame on them.

During the past years, I’ve heard more credit card horror stories than I care to remember.  The Smart Balance Transfers blog is littered with disheartening stories of consumers who’ve had fixed rates changed to variable rates, interest rates doubled (or tripled) and minimum monthly payments increased by 200%.  Many of these people were pushed to the brink of bankruptcy.  Others are simply being fleeced.  And now that Citi has decided to raise interest rates to 29.99% on tens of thousands of customers with good credit, I’m willing to resort to scare tactics to convince readers that there are 29.99 reasons to focus their efforts on paying off credit card debt as soon as possible. Continue Reading »

I just got a copy of the Citibank interest rate increase letter and, perhaps like many of you, am completely baffled.  Unfortunately, I’ve spent the past five years reviewing credit card terms and was hoping to find some definitive answers in this letter.  However, the terms Citi is proposing are as incomprehensible as its decision to raise rates on what I’ve learned from over 60 readers are very good customers with very good credit scores.

1.)  Traditional opt out notices require those who opt out to accept an immediate closure to their account.  You opt out, the card is closed, and that is it. Period.  In the letter I reviewed, it states that the cardholder can use the card until the expiration date on the card.  This wreaks of trickery and my fear is that consumers who opt out but use the card after the opt out date will see their rates increased to 29.99%. Continue Reading »

After a relatively calm three months in which credit card rate increases slowed substantially, Citibank’s decision to raise interest rates to 29.99% on tens of thousands of customers has taken many-myself included-by surprise.  Yesterday, I posted some options for people dealing with this situation and I wanted to update those as well as point out some additional points. (See Citibank Interest Rate Increase Solutions for yesterdays article as well as Citibank Raises Interest Rates A Lot to read comments from other visitors.)

First off, most people will need to opt out of the rate increase.  Continue Reading »

The shocking and unprecedented interest rate increases from Citibank has generated a flood of comments and, as editor of Smart Balance Transfers, I am trying to put as much helpful information online as I can.  Consequently, I am hoping that someone can email me a copy of a rate increase notice so I can review the terms and conditions more fully.

If you received a Citi rate increase letter and want to help out, please email us a copy.  However, PLEASE be sure to use a BLACK MARKER to cover any personal information such as your name, account number etc, as I would like to post this online.

Thank you in advance for your help and please see our tips on Citibank Interest Rate Increase Solutions for ideas on how to handle this troublesome development.

After a brief pause, and right before new laws to limit interest rate increases take effect, Citibank appears to have raised interest rates on a wide range of its customers.  Over the past weekend, close to a dozen people posted on Smart Balance Transfers about monstrous rate increases that lifted APRs to 29.99%.  Fortunately, if Citibank raised your interest rate, there are easy steps you can take to lessen your financial pain

Option 1:  Opt Out and Open a New Credit Card Account

Unless you have the ability to pay your credit card balance in full, the best way to deal with an interest rate increase notice is to opt out by closing your account.  This will allow you to repay your balance at the current rate, ultimately saving you hundreds, if not thousands of dollars in interest expenses.  If, for example, you carry a $10,000 balance on a Citibank card with a rate that is moving from 15% to 29.99%, you will save around $1,500 in interest by electing to opt out.  This is a no brainer.  Don’t over-think it.  Get on the phone right now and opt out. Continue Reading »

Rising delinquencies on credit card loans are hurting banks, potentially leading to even tighter lending standards which, in turn, threaten to limit credit availability to a wider range of consumers and dampen our country’s economic recovery.  Yesterday, consumer credit bureau Equifax reported that new credit cards issued have fallen by 50% since July of 2008.  On the heels of that release, Capital One reported today that its annualized charge off rate rose to 9.77% from 9.32% in August, a fairly large step in the wrong direction at a time when more and more “experts” are signaling the Greatest Recession is nearing its end. Continue Reading »