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.
Unfortunately, opting out of a rate increase not only reduces your available credit, it also increases your credit utilization ratio (the amount you owe as a percent of your available credit). Credit utilization ratio’s account for about 30% of your credit score, so closing an account can dramatically lower your credit score. This is a problem, but not an insurmountable one.
Essentially, the best way to limit the damage an account closure will have on your credit score is to open up a new credit card immediately-as in, right now. By opening a new account as soon as possible, you will increase your available credit, which will decrease your credit utilization ratio and thus increase your credit score. More importantly, however, opening a new credit card account before Citi reports the account closure to the credit bureaus will dramatically increase your chances of getting approved. Once your credit report is updated, your score will likely drop, significantly decreasing your chances of getting approved for a new card.
To compare current credit card offers and apply online, you can review credit card applications in the main section of Smart Balance Transfers.
Additionally, to estimate the effect an account closure will have on your credit score, you can review free credit report offers in the main section as well.
Option 2: Get on the Phone with Citibank and Fight Your Rate Increase
Before the credit crunch, most credit card companies were willing to negotiate rate increases. Today, they are much less open to negotiation. Consequently, success rates can be relatively low. However, if you want (or need) to keep your account open, call customer service and ask for a U.S. based representative. Then ask to speak to their supervisor. If the supervisor can’t help, ask to speak to his or her supervisor. If you have no luck, retry the process four or five times. Fight the urge to take your anger out on the reps-its not their fault, and you may get lucky.
Option 3: Do a 0% Balance Transfer
If you have good credit, you should be able to qualify for a credit card that offers a 0% interest rate on balance transfers for 6 to 12 months that will have a much lower long term interest rate than 29%. Unfortunately, consumers with $15,000 or more in debt may have a hard time getting a big enough credit limit to transfer all of their debt. However, if you have a few thousand dollars in credit card debt, you should be able to get a 0% balance transfer credit card with a high enough credit limit.
Option 4: Get a 2nd, 3rd, or 4th Job
Sleeping and spending time with family is over-rated. Why not just work 18 hours a day and hand over whatever money you don’t pay in taxes to bail out Citibank directly to Citibank to cover your higher interest expenses?
Option 5: Part with a Kidney
Sure, kidney’s are vital organs. But doesn’t keeping both kidney’s makes you just as greedy as Citibank? Why not sell one and give the profits to Citibank?
Final Thoughts: Okay, maybe there are only three good options. However, accepting an interest rate increase is not one of them. The key to successfully dealing with a rate increase notice is to act swiftly to insure options four and five never enter your mind.
Note to Readers: Please consider sharing your methods for dealing with Citibank interest rate increases with other visitors. All information you post is anonymous and your insights can go a long way in helping others deal with this troublesome situation.
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October 19th, 2009 at 9:21 pm
I got the letter today… unless I opt out, my interest rate will jump to 29.99% from 9.24%. Obviously, I’m going to opt out, but it sucks, because this is the card I have had the longest, so closing it will affect my credit score negatively.
October 20th, 2009 at 12:18 am
Citibank should burn in hell. I got the stupid 29.99 interest rate hike and I’m most likely opting out unless they fold when I call them.
October 20th, 2009 at 3:05 am
I just received my Citi increase notice today. My credit limit is $45k, but my balance is less than $300 so I’ll pay it off. I don’t know if I should opt-out and close the account since losing that much available credit will likely hurt my credit score. Maybe I should just use it periodically and pay it off each time? Suggestions?
October 20th, 2009 at 6:36 am
I have been a “member” since 1982. My interest rate was already 19.99 and I paid them $100 in interest last month alone. I have been thinking about just getting rid of this card since I have a great credit score. I also got the letter raising me to 29.99%. When I called to opt out and asked why they were doing this, I was told the want to maintain the high level of customer service they have always provided to people in the Citibank “family.” My response, to my “family member” who clearly resides in India, was “is this any way to treat your family??” He told me he recently had his rate raised to 29% also and he had to close his account too. It was actually slightly humorous. I am also going to refinance and get rid of my Citi Mortgage. Screw them!!
October 20th, 2009 at 6:37 am
I too got the notice that my interest rate was going to be raised to 29.00%. I was on hold for quite awhile waiting to talk to a rep. I asked him why they were doing this and he too said it was the new law that was going into effect. They were raising the rates while they still could. I asked if there were a lot of people opting out and he said he had been busy all day closing accounts. Citibank can go bankrupt as far as I am concerned.
October 20th, 2009 at 9:36 am
I received the letter yesterday and tried option 2. I had my call escalated all the way up to the head of customer service at the call center. My wife and I like several of the posts have a high FICO score, never been late and have had the card for 15 years. The head of the call center told me that they are going to be offering a new program in the next day or two to transfer your balance into a loan program and still have your credit card at the new APR but it will remain open for purchases. My wife has had this card for 15 years and several years ago we closed all of her other cards, so if we closed her only remaining revolving credit line, her FICO score would take a huge hit and well that would impair her from accessing a new card from another company. I must say that I am very disappointed with how congress and the Obama administration is handling this banking/CC over site.
October 20th, 2009 at 10:58 am
This new plan seems interesting, if only because it is a clear response to the havoc they have wreaked on customers. I really don’t know what can be expected, and I fear they will use the 29.99% interest rates to scare people into accepting high rates with this new plan.
October 20th, 2009 at 11:02 am
If you get a chance, please let us know if you were able to get your rate changed or work out some kind of reasonable deal.
October 20th, 2009 at 11:03 am
Joel,
If your card has rewards and no annual fee, that’s a good way to keep a line of available credit without forking over interest. However, they do make money every time you use the card, so if you want to completely starve them of your business, you may want to keep the transactions small.
October 20th, 2009 at 11:07 am
As I noted above, apply for and open a new credit card as soon as possible to minimize the damage that will be done to your credit score. This is really shameful.
October 20th, 2009 at 12:16 pm
EDITOR’S NOTE: I’ve added some additional thoughts to consider before opting out of this absurd rate increase.
October 20th, 2009 at 2:32 pm
I received a notice from CB yesterday as well. My 6.74 rate would be increased to 29.99% – that is INSANE! I called and asked why – since I have never been late and have a 740+ credit score. Granted, my balance is a bit higher (9k) – needless to say, I cancelled on the spot and refrained from using any four letter words. Although that was quite difficult. The excuse I was given was boilerplate – “in order to give credit to all of our customers.” CB can kiss my … – I will NEVER do business with them again and will be sure to share this with friends and family.
October 20th, 2009 at 5:19 pm
I suppose it should make me feel better to know that I’m not alone in being outraged at Citibank’s latest tactic to screw their customers. Years ago, CB held my mortgage. Before refinancing, I asked them to lower my rate – they wouldn’t budge. I went elsewhere and got a rate 2% lower. They drove away a long-time customer with a great credit score and lost tons of interest on my loan each year. Now after 24 years as a CB cardholder, they have raised my rate to 29.99%. I paid off my whopping $53.00 balance today and was grateful I’d been paying down the amount since the Dec. ’08 rate increase. Good riddance!
October 20th, 2009 at 6:55 pm
Congratulations on making your final payment to Citi. Like many others I have heard from during the past two days, it looks like you are an ideal customer. Perhaps you should have missed some payments or defaulted on your mortgage. That seems to be the only way to get a good rate these days!
October 21st, 2009 at 5:58 am
I had a balance transfer of $14,000 at 0% interest. CB said that it will go up to 29.99% on 12/1/09 unless i opt out at 18.99%. I went crazy on them being that I bank with them and always have been a good customer with a very good credit rating. I fought with them all night and finally got a senior acct. rep who would could only give me 19.99% for six months and keep my acct. open. She said hopefully CB will change the terms within that time period. I am so disgusted at Citibank and I hope they go bankrupt. What goes around, comes around.
October 21st, 2009 at 7:02 am
I received my notice on Sunday. I was outraged, made phone calls and was shunned by every rep that i talked to. I sent them an e-mail asking them what I was supposed to do about my credit score to which they responded with an e-mail stating that credit scores are determined by credit bureaus. Well DUH. I applied for a personal loan to pay them off and close them myself. How can they hold us hostage like this? Everyone needs to stand up against this. I won’t be dealing with them again.
October 21st, 2009 at 9:50 am
Jim,
I would actively seek out a balance transfer. If you have good credit, you can get a 0% balance transfer for 6 to 12 months from another company as well as a lower long term rate. By all means, however, make sure you are fully opted out by requesting a written confirmation. If your rate jumps to 29.99%, you’ll be spending an extra $1400 a year in interest. Phone reps at all credit card companies, especially overseas reps, have a tendancy to tell customers just about anything to get off the phone. You’re potential interest expenses are so large that you truly must secure an opt out.
October 21st, 2009 at 9:51 am
Since 1998 I have been a loyal Citi customer. 20K Credit line, that has been paid down and pushed up. Never a late payment, always more than the minimum. I recieved my notice today after paying 6K to Citi last month. 12% to 29.99%. This is what they do to loyal customers.Thanks for the bail out, glad Citi is reaping the benefits and raping its former customers. I closed my account.
October 21st, 2009 at 9:52 am
Amy,
Without knowing your credit card balance or the rate of your personal loan, I can’t say for sure what your best option would be. However, you may want to look into getting a 0% balance transfer unless you can secure a personal loan at a sub-10% rate. If you’re unfamiliar with balance transfers, you can learn more in the main section of Smart Balance Transfers.
October 21st, 2009 at 3:58 pm
I too received the Citi rate increase letter. I’ve been with Citi since 1991 and my current rate is 9.24% and they want to raise it to 29.99% What a crock of you know what. I wrote a letter detailing this ripoff and sent it to the head of the US Senate committee on Banking, the head of the US House Financial Services committee as well as my state senators. I’m sure nothing will come of it but i felt good writing them. Who knows, maybe one of them will actually read it and make something out of it.
October 21st, 2009 at 4:58 pm
I received the 29.99% rate hike letter today as well. I have been with Citibank since 1993. The only reason I keep the card (with a $21K limit) is because I like the photo on it (its 16 year old) haha.
I called to renegotiate the rate and 2 different customer service reps gave me the speech about why they have to do it because of the recently passed legislation. I told the final guy (when I called back to cancel the card) to save his breath, unless he had the authority to lower my rate to a market rate. He tried to scare me into just keeping the card with a zero balance (because of the impact on my credit score). I cancelled. It was nice having that safety net of a $21,500 credit limit, but I felt it was important to make a statement that this was not an acceptable business arrangement for me.
Good luck to all who actually need their credit or are carrying balances.
October 21st, 2009 at 6:38 pm
We also got this notice for two cards. Have been with Citi for over 20 years and never been late. However, not sure if we will qualify for a balance transfer as our balances are high and our credit is just okay. Anyone have suggestions? Also, is it possible to negotiate the new rate for future purchases and leave previous purchases at the old rate? Anyone tried that? I am also glad to know we are not alone.
October 22nd, 2009 at 12:34 am
My story is the same as CCC though my balance is closer to 12k due to dental and medical bills (another hellish issue)…tried not screaming as they passed me hither and yon across three countries and 5 reps before I finally demanded the phone number of the head of their Media/PR department. If anyuone would like that info I’d be happy to publish it as the rep told me that it was only supposed to go to media contacts. Aren’t we all the media these days thanks to YouTube?
I have had it with being jerked around by companies that I pay. As I pointed out to the very snotty phone rep, I pay their salaries. Me. And YOU. I have HAD it.
October 22nd, 2009 at 11:22 am
Lisa,
I am very sorry to hear about your situation and hope your opt out rate is reasonable.
Also, if you could contact me with the PR department info, it would be much appreciated.
October 22nd, 2009 at 11:23 am
I too received the love letter from Citi and I have to say I was speechless. I’m never late, I rarely use my card but do carry a balance. On the rare occasion that I do use my card I take that purchase amount on to my usual minimum payment. I don’t carry any other credit card other then Citi and neither does my husband (he has a seperate account but also received the letter) so this is a double wammy for us. If I allow the interest rate increase I could pay an additional $100 per month in interest and that is just not an option for me. Given the current credit market I’m not sure we could even get new credit. Citi certainly has me (and by the postings alot of others) between a rock and a hard place.
It certainly doesn’t seem right that they can inflict this obscene rate increase on customers but I will likely have to let me feet do the talking as I move my business from Citi. I don’t bank with them (if I did I would close those accounts as well) but I do have life insurance and investments through Primerica (which is a Citi division) which I certainly plan to shop around.
October 22nd, 2009 at 11:25 am
Terri,
If your opt out rate is reasonable, you may want to accept that and try to renegotiate later. I’ve yet to hear a success story from anyone dealing with Citibank this week.
Also, you may want to check your credit score to find out where your credit stands (you can view free credit score services here). If its not as bad as you think, you may be able to gain approval for at least a partial balance transfer.
October 22nd, 2009 at 11:35 am
Seattle Mom,
You may want to consider opening a new credit card account-not only for a safety net, but to limit any damage to your credit score that closing the account may have. Since you have had the card for so long and it had such a high level of unused available credit, closing the account could have a very big negative impact. A number of free credit report sites offer 30 days that give you access to tools that can help you estimate how closing accounts can alter your score (you can learn more about these offers in the credit report section of Smart Balance Transfers). My concern is that when you need to have a good credit score, such as when applying for a car or mortgage loan, you will end up paying much more than you would have if you had left the account open or opened a new credit card account.
October 22nd, 2009 at 11:42 am
Let,
I would check your credit score using a free 30 day trial-these offers are in the credit report section of Smart Balance Transfers-and if either your or your husbands score is above 700, act quickly and apply for a credit card. Closing both accounts will likely have a negative impact on your credit score, but it would be absurd to pay $100 a month simply to increase this number. Also, as I note in the article, if you qualify, a balance transfer credit card can not only help you reduce your debtload faster, it will also send your interest money to someone other than Citi.
October 22nd, 2009 at 11:44 am
David,
I recently heard that writing formal letters to your elected representatives is one of the few ways to actually get things done. Apparently, the whole email thing is too efficient for the government, so piles of paper from voters are really the most effective way to get their attention.
October 22nd, 2009 at 3:54 pm
I had the same thing happen to me. I told them to cancel the card. I’ll pay my balance (which was low) and we can go separate ways. I’ve always paid on time, and they still raised my rate to 29.99%. I called my congressman, and I hope everyone on here does the same. Tony Soprano wouldn’t charge that high of a rate!
October 22nd, 2009 at 5:49 pm
Got my letter in the mail raising my rate to 29.99%. Like everyone else, I was surprised. I routinely charge $2K-5K per month to the card, carry no balance and have a high credit score. I’ve had the card for about 20 years, reliably paying on time throughout. I can’t imagine what I’ve done to get the rate increase, but I did have an illegal charge of about $20 a few months back that I reported. Maybe that $20 ticked them off?
In my case, they can’t make any more money off me by increasing the rate, so seems the only purpose was to make me use a different provider out of principle. They have to know this will drive customers away. So I’ll oblige and move my business elsewhere. Not really attached to Citibank other than I know the card number.
October 22nd, 2009 at 5:53 pm
I too had my rate increased. I called and spoke with a sympathetic employee at the other end. I asked for a name to write a letter to, I want to formally file my complaint with the company. For 20 years I have had that card and I ALWAYS paid it. I have gotten up $25K on that card and paid it down to $0. The fact that they would do this with no recourse is frustrating. I didn’t realize that my credit score of 800 will now be affected. I will do what was recommended and open another card and ask for increases in credit limit on some other cards. I am also going to send a copy of the letter to my local senator to let him know my frustration. This cannot be legal.
October 23rd, 2009 at 12:29 pm
Good idea Linda. The more people who send letters to their representatives the better the chance of change. Unfortunately, however, I don’t think they’re doing anything illegal, just plain unfair.
October 23rd, 2009 at 12:31 pm
I think paying on time for 20 years was what got them kicked out. The more I hear from customers, the clearer it has become that Citi is targeting its best customers. Perhaps they’re trying to get more bailout money.
October 23rd, 2009 at 10:09 pm
i’ve been a model customer for almost fifteen years. got the notice of increase from 19.99 to 29.99. called and told them i was going to cancel and they essentially told me not to let the door hit me in the back on the way out. i have a ton of rewards points logged so i’m just going to pay the card off and never use it again. i consider myself lucky enough to be able to pay it off.
by the way, does it seem particularly insidious to everyone that they do this increase the month before Christmas? if you had a balance and wanted to pay it down, this has to be the worst time of year to do so. these are absolute loan shark interest rates and it disgusts me that it is legal for citibank to shaft its customers like this.
October 24th, 2009 at 2:31 pm
As a business owner, at the beginning of this credit crunch, I decided to draw down as many of my credit lines as I could, both personal and business in order to assure I had needed liquidity in case the economy got really bad – in hind sight, it was the right move – we have been liquid and able to take advantage of the power of cash in our negotiations. I have sterling credit, never a late, or any other negative.
Chase, Bank of America, and other lenders have all been reasonable and have stuck with me as a good customer.
Now Citi, who gave me my first credit card that I used to fund the startup of my business 26 years ago, has decided to raise the rate on my $90,000+ balance to 29.99% because of “the new laws”
That means I will go from paying $7,110 in interest per year to $26,991 per year. That would be money that I could pay towards a new employee to help us expand, or pay to a local business person (maybe even buy a new car), or put in my retirement fund so I am not a burden some day.
This is pure insanity, I will “opt out”, and will cancel any credit cards I have that are processed through Citi from other businesses. After reading all the other comments here, I will not even try to negotiate – what they are doing is unethical – pure and simple, and they do not deserve any of our business.
I am just so glad that congress did not do something stupid like enforce a usury rate of 10% because that could have prevented people from getting the credit they need at 29.99% – give me a break! What Congress should have done is immediately frozen all rates and credit lines to the highest credit line in the previous 12 months and lowest rate in the previous 12 months – then given the bail out money. Any new cards would have been issued under the new rules to prevent this kind of action.
Best of all, I want to thank Citi for allowing me to hurt my credit score by opting out of this action. Heck of a way to repay a loyal customer.
Never again will I deal with Citi or American Express (they are a different story – when we were drawing down our lines, we called Amex and asked if we could use a check with a very low lifetime rate to draw down $50,000, they said yes no problem with our account history and credit, so we wrote the check, our bank accepted it without a hold because of our history. Imagine my surprise when I was called by the bank officer that the check bounced and we had already transferred the money, I took care of it with the bank and after explaining it to them, they didn’t even charge me a fee. I called Amex and they said they had reduced our credit limit to $500 – I thought it was a joke – it wasn’t)
What really gets me is that if the United States Gov owns 1/3rd of Citi and allows (encourages?) them to do this – what will happen if they control the health care system. As a business owner, I would love to hand over our health insurance to the Gov, but after this experience with Citi, I am really concerned.
October 25th, 2009 at 12:26 pm
I hope everyone cuts their citi cards up I think it is unfair with their ridiculus 29.99 interest when some cardholders still have 750 fico and higher I am sure there are other companies wanting us to carry there cards in our wallets…..
October 25th, 2009 at 9:34 pm
They got me too. I have a $50K limit, with about $35K owed. 12% right up to 29.99%. No choice but to opt out. BoA did this to me a few months back, so I moved everything over to Citi. I figured my 20+ year history with them, and 0 late payments would leave me safe. I hope Amex isn’t going to do this too. I may end up with just a debit card.
One thing’s for sure…I WILL NEVER do business with BofA or Citi again. I’m moving my checking accounts on Monday.
October 26th, 2009 at 10:16 am
Bill,
Am sorry to hear about your predicament. I imagine you always pay on time and, since you carry a balance, also generate income for them, which means you are not only a good customer, but one who makes the bank money. Only at Citibank would an account like yours be closed.
October 26th, 2009 at 10:21 am
Nancy,
Cutting up your 29.99% interest credit cards and using 0% balance transfers to save money and stop feeding the Citi monster is the only way consumers can fight back and show credit card companies that we won’t take this kind of harrassment.
October 26th, 2009 at 2:08 pm
I think forcing people out before Christmas is part of the strategy so that people don’t spend and default after the holidays. However, with a November 31st cut off for the opt out, some people will just have to do their shopping early to preserve the low interest rates.
October 28th, 2009 at 8:19 am
After reading all the comments, I’m glad to know that I am not alone. I’ve had this card since 1990, never missed a payment or been late, have an excellent credit score, have paid off the entire balance five times since I have had the card. Upping an interest rate from 5.9% to 29.99% on a $25k balance is CRAZY!!!!
I haven’t called to opt out as of yet because I am stocking up on some stuff before calling. I only had three credit cards. Discover cancelled my card earlier this year for non-use and now Citibank is doing this. Looks like it will be American Express all the way for me!
November 4th, 2009 at 12:31 pm
Two weeks after the first complaints started pouring in, the Wall Street Journal finally references the Citibank rate increase
November 7th, 2009 at 11:58 am
If at all possible, do #1 above, but, for goodness sake, DON’T OPT OUT. Move everything off of the card to some new card (and there are plenty out there) and call and cancel the card immediately! I’ve been a card holder since 1986! I’ve never been late. I’ve carried balances in the past, but have recently made this our of our household finances cards which we pay off in full every month (something that, despite the rumors to the contrary) is an extremely profitable model for Citibank. A year ago my rate was 8.99%. Today I received notice of a second increase this time to 18.99%. I’ll get the automatic payments moved and cancel the card. It will hurt Citibank much more if you cancel the card now than if you opt-out. An opt-out leaves you on the books as a customer and helps their customer loyalty numbers, something they don’t care about next year, but do seem to care about this year. It also leaves you on the books as someone they think they may retain later by dropping the rates after they are more solvent. Why give them this sense of security? Why continue to let them use you as a statistic of success even though they have chosen to let you know you mean nothing to them as a customer? Lots of opt-outs will make them nervous. Mass cancellations could put them out of business in the only business category they have been making money in.
November 9th, 2009 at 1:12 am
I have had this card at least 20 years. 35K credit limit. 8% interest rate. Zero balance for almost the entire 20 years. High credit score. Recently cancelled ALL of my other credit cards (with say 12% or 16% rates) b/c this was “clearly the best one” and I was trying to clean up/streamline my finances, and had finally paid off all the other ones. Just got whacked with this RIDICULOUS ABSORBITANT 29.99 interest rate for no reason!! I got nowhere with customer service. I am IRATE – this was my one remaining card. I just applied for a new card with a better company – much better rate obviously (hard to get worse!!). Cannot believe they are treating their best customers as if they have horrible credit or have already declared bankruptcy. I feel very lucky I was (barely) able to pay off my cards and I am so upset for those who Citibank has now trapped. Unemployment is so high and so many people are struggling so much as it is. This is total B.S. and I will write to my Senator and Congresspeople.
November 11th, 2009 at 7:55 pm
When you opt how long do you have to pay your balance? I have been paying more than minimum on my 15K balance, just wondering how long I have to payoff under my current rate?
November 12th, 2009 at 10:09 am
Ron,
Assuming you do not miss a payment or bounce a check, you should have until the balance is repaid in full. However, having not seen the contract, I cannot say for sure. In particular, if you have a variable rate, that rate might increase when the Prime Rate or Libor increases. Thus, if the Prime Rate increases by 3 points, your rate would also go up 3 points. For a complete answer, I would suggest contacting your credit card company and requesting a response in writing.
November 16th, 2009 at 7:09 pm
Citibank just made new changes to my account term. APR went from 15% to 30% although we have had excellent credit history
They must be kidding!!! Anyway I opted it out and will get rid of it once and for all in few months. I already talked to all my friends not to apply to citicard of any type and I will keep complaining… I haven’t seen such a crapy finance institution… I hope they will broke…
November 18th, 2009 at 3:26 pm
I just received the letter from citibank that they are going to raise my so-called “fixed rate” %9.99 to %13.99. And I expect that they wil raise it again in the future. Is there any way to complain it to federal governmet?? I am pretty sure it will be all over the media. The government shouldn’t bail them out! We are now in the same position to citibank’s employee if the government let them go bankrupt!!
November 19th, 2009 at 9:36 am
Patrick,
The best way to draw attention is by writing letters to your representatives. For some reason, piles of written letters are the most effective method.
November 19th, 2009 at 3:35 pm
I recently went through the same thing. First in March they sent me a notice raising it from 9% to 17%. I argued with no success. I had longevity, excellent credit with them, and it all meant nothing to them. Since I wasn’t carrying a balance I left it as is. Then a few days ago i got another letter stating they are raising it to 21% for no apparent reason. This is making me wonder if the tactic of raising the interest rate is to force people to close out accounts to reduce the number of consumers with credit cards and minimize losses. Or is it to gouge people? Either way, I closed out the account. Sad in my opinion. They are losing great customers all over the place with antics like this.
November 22nd, 2009 at 8:14 pm
What on earth is going on? This is ridiculous and unconscionable! I like many have had my citibank credit card for 15 years. Good customer. Good credit score (760 last time I checked). This card has the highest limit of my 3 CC’s at $19K. However it also has the highest interest rate. It was 20% I was able to talk them down to 18% and for the past 6 months I have been diligently paying off the $5K balance. I estimated by Feb 2010 I would be down to a zero balance. And now this! I don’t want to cancel and lose that much credit but I hesitate to open another credit card. While I have 2 other major CC both with balances under $5K I also have $20K in student loans. I’m saving for a house next year. I just don’t think it’s wise for me to start opening/closing/transferring accounts now. Since I am so close to a zero balance I am planning on biting the bullet and taking the interest hit for a month or two and then flushing that card down the toilet where it belongs.
November 23rd, 2009 at 11:10 am
That’s probably the best move Encania, as opening and closing accounts before buying a house could impact your credit score in a number of ways.
November 24th, 2009 at 12:45 am
I got my letter today, and as a “valued” customer for 20 years, was completely taken off guard. However, I am undecided about whether to opt out. Although I have an excellent credit rating, my balance has almost tripled in the last two years as a result of a financial blow that resulted from a family death and has me using my credit card for practically everything except the rent. Transferring such a high balance to another card would pose a problem. Plus, I’m presently paying a 0% APR which will expire in July 2010. At that time it will increase to 10.99% (this may seem pretty low compared to the rates I’ve been reading on this site today, but it would still be a hardship for me as I’m having difficulty making the payments at the 0% rate)or if I choose to opt out, the rate will be 6.99%. So I wonder if I should keep the account open and continue to pay as much as I can while the 0% lasts in the hopes of getting the balance low enough to be able to transfer it in July (as well as keep my credit rating intact) or should I opt out, considering my balance may still be too high to transfer in July or there may not even be any lower offers out there at that time. Any suggestions would be most welcome.
November 24th, 2009 at 9:50 am
Both 6.99% and 10.99% are good low rates and it is unlikely you’d be able to get 6.99% from anyone these days. Given that your rate won’t expire until July, you may be best off trying to pay it down now. If another 0% deal is out there in July, then definitely look into it. Unfortunately, however, you have non-promotional rates that are about as low as they come these days, even with the rate increase.
November 24th, 2009 at 3:02 pm
i got the letter today. is going to go from 12.24 to 16.99. i negotiated to 14.99 for 6 months. i am going to pay it off and find a new one hopefully by then. this was so uncalled for.
November 28th, 2009 at 1:29 am
Got mine Monday. Still angry so went surfing and found this site. Mine was going from 11.24% to 29.99%, I opted out. It really sucks for me, this card had my highest limit and I really liked doing business with Citibank until this point. This was such a gross rate hike, I could not in good faith just lean back and take it. The sucky part is its hard for me to get new credit in this current environment. I have been rebuilding my credit for the last few years in hopes to buy a house soon. I went from somewhere around 250 to now a 650 fico. 650 used to be considered good..now you can’t get a $500 limit card with it..atlease not from a real bank. I really dont know how things can recover with instutions like Citibank declaring all out war on their customers.
November 28th, 2009 at 11:15 pm
I got my letter today. Its going to 20.99. I only owe $1,800. So I’ll pay it complete. I will not cancel until I get a new credit card. I have been with them for ten years and I have only been late once several years ago. (I was out of town and forgot to log in to send the money.) Over the years, I have paid citi good interest in my major purchases.
For me they can burn in hell and go bankrupt. I will cancel as soon as I can since I want to protect my score. (750+) This is no way to treat your best customers. These are the tanks we get for bailing them out.
November 30th, 2009 at 3:04 pm
First letter I got was an up to 14.99% went ahead and took that one. Now I am getting one for 18.99%. Card holder since 1995 almost 15 years. Never been late NEVER! I am opting out. And telling everyone that has one!
Jesse Peterson
Oklahoma
November 30th, 2009 at 9:14 pm
I got my letter last week. I was floored. I paid my bills on time, never went over the limit. A faithful customer of 16 years. I wrote to the Attorney General and the White House. I am going to write to the President of Citibank and my representative. I opted out. I hope so many people leave them that they go under. They deserve it. They are a disgrace.
December 6th, 2009 at 12:46 pm
Hey Citi Bank who gives tou the authority to charge 30% interest? Are there some sort of banking rules? Who would make such a rule? You have forced many people into a corner. Maybe we can talk.
December 9th, 2009 at 12:06 am
I have a $10K card @ 6.49% that was carrying a $9600 balance as I paid off other debts.
Got the letter: it’s going to 29.99% Decmeber 20th. An interesting twist on mine: it states that if you keep the account open and make on-time minimum payments, they will refund you 10% of the interest on your statement, effectively making the interest 19.99% (still a huge leap from the low one I had).
I wasn’t really using the card anyway (except for as a high-interest shelter), and it would only reduce my total credit by a few hundred bucks to opt-out (not much of a credit score hit there), so if I understand y’all correctly:
I should opt out, and continue making payments on the balance at 6.49. Or is it better to try to open one of those 0% deals (I’m around 720-750), first?
The irony is the best 0% promo found was from…
wait for it…
Citi.
Ha.
December 9th, 2009 at 8:50 am
Whatchathink,
Citi definitely has better deals for new customers than their old ones. As for you situation, if you have enough available credit and closing this account won’t change that too much, you may be better off waiting to get a new card until you need it. Right now, you’ve got a good deal with 6.49%. (And, wait for it, nice How I Met Your Mother refeerence. Maybe Citi is Goliath National Bank.
December 13th, 2009 at 3:56 pm
Greedy, blood-sucking leeches!! I have been a citi card member since 1994. I carry a high balance due to some misfortunate happenings in my life. I am planning on opting out and have already opened and was approved for a new card. These terms are “loan shark” rates. This had to happen all because of the new credit card laws being enforced in 2010. I am disappointed in Citibank service anyway so I’ll take this “opting out” as somewhat of a blessing in disguise.
January 12th, 2010 at 4:46 am
Just wanted to say thanks. We never received the opt out letter and were shocked and horrified to see that our interest rate had jumped 20 points. Following your advice helped us out. We were past the deadline, but by asking for a U.S. rep and then her supervisor, we were able to get the opt out deal. Thanks!
January 12th, 2010 at 3:41 pm
Thanks for taking a moment to give thanks. I really appreciate it. I'm going to repost this advice more prominently so others can take advantage.
February 4th, 2010 at 5:31 pm
If you did not read your opt out notice and just learned that your interest rate increased to 29.99%, please share you concerns on the open letter to the CEO of Citibank I have posted in hopes that this situation will be resolved fairly. See http://www.smartbalancetransfers.com/blog/2010/02/letter-vikram-pandit-credit-card-rates-719/ to read this letter.
It is my hope that Citi will realize it made a mistake and help out the people who have been hurt by this rate increase. The more people who share, the better chance we have of getting the attention of the people who can fix this situation.
February 23rd, 2010 at 6:48 pm
I NEVER received the letter, AND my interest went from 12.99% to 29.99%. After I noticed the unusually high monthly payment I called CB and asked why such a high payment. The month prior my payment jumped from approx $300 to $575+ but my office manager paid it thinking I had made inordinately high purchases for that month. She never thought a thing abut it, I did not notice it….until the next month.
I called CB Customer Service, they said they had sent me an “Opt Out” letter (I get all my delivered directly to my home). I replied that I never received it and why did they not also email me the letter since they email me everything else, and I mostly pay my monthly bill online. The lady said “that is just the way we work”. I have never been late with a payment and have a 735+ credit score.
She said it was too bad I did not receive the letter but I was out of luck.
February 27th, 2010 at 9:07 am
I did not receive a letter from CitiBank and my interst rate was raised to 29.99%. I called them 5 times to get my rate lowered – to no avail. They do not care. I have excellent credit and NEVER made a late payment. Paid my $3,500.00 balance off with my tax refund, opened an American Express Blue Card and closed the account. I will never do business with them again and neither will my family!