I’ve begun getting comments from visitors who are being asked to do a $5000 balance transfer with Citibank in order to receive an interest rate lower than the 29.99% offer currently being pushed on consumers. At this point, only two reports have come in to Smart Balance Transfers, so we don’t have a ton of information of this deal. We are also unsure of the complete terms of the deal and whether or not this is something customer service reps are offering or part of a letter being sent to customers. Here’s a comment we recently received:
“Citibank credit card users across the country rec’d RATE HIKE notices this week – 21.99% !!!!! Seems the only way out of this soon to be illegal practice of BAIT & SWITCH is to “transfer” another $5000.00 to them!”
While this aggrieved customer may not be correct about a bait and switch, her complete posting contains some valid points. What strikes me most is the way this offer tries to lure customers into staying with Citibank. It is not a good deal. Consumers can opt out and keep their old rates. And if they want to do a balance transfer, there are good credit card companies offering 0% balance transfer deals lasting one year (you can view 0% balance transfer offers in the main section of this website).
Ultimately, consumers getting punished by Citibank with rate increases should go out of their way to stop paying interest to Citibank, whether by paying their bills off in full or transferring balances to another credit card company. No one should accept a 29.99% interest rate unless they intend to never pay interest and no one should accept a 15% balance transfer offer when there are 0% balance transfer deals available.
Citibank’s decision to charge customers 29.99% is shameful. It is causing Citi to lose their best customers and pushing other customers to the brink of bankruptcy. So unless you want to help support this type of predatory lending, opt out of your Citi card, ignore the Citibank balance transfer offer, and transfer your balance to a company that won’t try to squeeze every penny they can out of you.
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November 17th, 2009 at 9:05 am
I got this letter. I had to transfer $3000 or more in order to keep my current terms. Otherwise my rate would be raised to 19.99%. Reading your articles I realize that 19.99% is a bargain, but it still sucks. I opted out and canceled the care. Yes, I have excellent credit, pay in full each month ($1,000-1,500), and have been a good customer for 15 years. The customer service agent did not offer me any other terms.
November 17th, 2009 at 10:31 am
Good Customer,
19.99% is no bargain. Sorry if something I wrote lead you to believe otherwise. Perhaps I was being sarcastic, but unclear. No one with good credit should be paying more than 15%-anything more than that should prompt you to move your balances to a new credit card.
June 14th, 2010 at 4:16 pm
We received an offer of a bal. trans. through CITI that we couldn’t refuse. We were told it went through. I received my credit card and a letter saying the (large amt.) was transferred to the creditor we wanted the money paid to. We had not received any kind of bill from CITI so after a month we called CITI and they said the bal. trans. never went through as CITI stopped it because the original offer should never have been mailed to us. So now we will have interest of 2500.00 on the creditor that was not paid. CITI acknowledged that they did not call or write to us when they knew about their error.
You can’t even imagine how mad we are and CITI has not heard the last of us.
June 15th, 2010 at 10:23 am
Dee,
While this is definitely not fair, it is important to be careful when doing balance tranfers, especially when you get offers in the mail. I don’t in anyway condone this behavior, but I always advise people to continue making payments on old credit cards until you see the balance transfer appear on your old card. Credit card companies can take up to a month to transfer balances and (apparently!!!) change their minds at any time.
June 19th, 2010 at 2:12 pm
I visited the site and they are making the O% interest till to end 6/2011 with an APR of 19.9 thereafter. Now that the law requires banks to have higer interest balances paid first, Citibank has figured around it by offering 0%,; xisting low interest rate balances get paid first, then the 19.9% rates kick-in a year later. They have sent me two mailers with checks encouraging I make up to four balance transfers with fine print on the 19.9% after the year is up. They even upped my limit after reducing it. Useless for large balance transfers.
June 21st, 2010 at 7:59 am
Rudy,
I think they are offering different deals to different people, based on data they have on the customer. Balance transfer checks like the ones you received are particularly dangerous, especially if you have a balance on the card already. That is due to the payment allocation you mention above, where they can use all of the minimum payment to reduce the debt with the 0% rate while other balances rack up interest. Unfortunately, Citi does offer some of the longest 0% rates available and charges tame 3% fees (compared to 4 or 5% balance transfer fees from others.) Thus, while the offer you got wasn’t particularly good, the deals they are offering to new customers are. Kind of a catch 22.