Despite Pledge, Concordia to Stop Paying Credit Card Payments, Blaming 'Difficult' Environment.

BankOfAmerica did the same thing and jacked the rate on me a couple of months ago. I'd never missed a payment or gone over my limit. I took the option to keep the old rate and pay off my card over time. I can still use it but charging anything will kick in the new much higher rate on my entire balance.

@MrsLopsided: I think this is the typical opt-out agreement--you can't use the card for new transactions if you refuse the new rate.

If the NYTimes is correct, you'll be able to keep using your Citigroup card until it expires.

Boy, you'd think with all our taxpayer funds we're giving to these assclown banks that they'd show us some sort of appreciation. Oh well, I guess the price of hookers and blow for the Citigroup execs has remained constant and they need to get that money from SOMEWHERE.

It's times like this, I yearn for the good old days. I mean, the good old days like Shay's Rebellion days.

You know what would be hilarious? If we took up Concorida's advice above and just ogranized a massive, boycott of payments to Citi cards. If everyone just missed one payment, in a pre-determined month, their unilateral decisions to raise rates would likely disappear. Of course, the threat of that missed payment on your imaginary FICO score makes everyone say, oh noes, I can't do that. But think about it. What if the consumers were to get a little organized?

But doing the organizing would probably be a crime, or at least tortious interference with their contractual rights, and so it will never happen. But it should.

hooray! Just in time for me to pay off my credit card, and keep paying it off every month, and taking their rewards.

@stevejust: I accidentally missed a single payment on my Citi card once and they jacked up my rate to 23%! They've refused to lower it to anything remotely reasonable since, except they inexplicably keep sending me 0% balance transfer offers. I just don't use the card anymore.

I wonder if they'll bother to raise rates for folks who religiously pay off every month. Oddly, I just recently saw my rate go down a couple points (I only noticed because I was checking for it) but that's not to say it won't go back up again.

Ah well raising my rates is like buying lottery tickets. There's a slim chance you might actually collect on that rate someday, but probably not. :)

Will this affect a card with an introductory 0%-til-next-year rate? As in, is it going to take my 0% and make it "normal" 12% PLUS 2-3% come january?

In related news, Citigroup executives take 2 week all expense paid business trip to Tahiti to "reorganize." $500 wine will be served.

Wells Fargo did this to us last month, bumping our rate from 10% to a whopping 19.99%. They gave us the option to opt out by canceling the card in order to pay over time under the old rate. We canceled with them the following day. We've never missed a payment, have always well over-paid the minimum, and I will be happy to make my final payment to them in just a couple of short months. Way to go credit card companies! That's how you retain customers... jack the rates up on the ones who haven't done anything wrong (besides use your services)!

@humphrmi: That's what my wife and I were thinking since we pay in full every month too, to me its the principle of it though.

@citnos: Some would argue that using a CC in such a way to increase the balance every month, IS doing something wrong.

The rate increases are a direct result of consumers defaulting on credit card debt.

@stevejust: As hillarious (and probably deserved) as a boycott would be, I have a feeling the government would intervene, somehow.

I'll give you a hint: it starts with "B" and ends in "ailout"

@kwsventures: Yea, brilliant strategy... Lots of people are defaulting? Why don't we raise everyone else's rates so that more people can't make their payments!

Bank of America already forced me to close my credit card with them because they wanted to raise my rates to something outrageous like 26% (even with an immaculate history). I guess we'll have to close the Citi card too.

I can only hope that people, including me, can learn to live without credit cards, and all these banks that were making money hand over fist for so long figure out what happens when you abuse your consumers.

I hvae a checking account with overdraft at citibank. I was just notified that when Citibank uses the overdraft they wiill charge you a $10 fee. I thought that is what the overdraft is for? Am I missing something?

A bit off topic, but I was making a payment on my Chase Disney card today and I saw that they have actually lowered my APR to 5.9% and they haven't even written to me to brag about. That's refreshing.

@jusooho: But we're not increasing the balance every month... we used the card to pay for a rather expensive but necessary car repair on my husband's car and it will be paid off in 2-3 months. The card itself has been cut into little pieces and are probably sitting somewhere in the dump as we speak, and has been since long before this whole mess started...

My citi bank card also went down from 7.9 to 6.9 magically this last statement. go figure.

@stevejust:

Why wouldn't they just screw over everyone and jack up their rates? If you really want to hurt them, just have everyone not use a Citi card for that month. Then they wouldn't get the fees for any new transactions and you don't have to worry about effecting your rate or FICO score.

@Orv:
They're sending you those offers so they can get more interest out of you. See, if you transfer a balance at 0% they'll just apply all your payments to that 0% balance instead of to the 23% balance. More money for them, while screwing you.

I just got mail from them yesterday. Its funny because I had credit through them for a couch from the now defunct Wickes Furniture. I paid my couch off 6 months early while I still had 0% interest (I actually overpaid on accident by $25). My after promo rate was like 14.99%. That was 6 months ago. Yesterday I got a letter from them saying my interest rate was going up to 24.99%... why?

meh. I have two citi credit cards, I pay them off in full every month. Rate increases don't effect me.

@yso: Most likely those reporting drops are due to the prime rate dropping. (Variable APRs)

@citnos: Actually, from the CC company's perspective, you ARE doing "something wrong". By paying above and beyond the minimum payments, you are avoiding some interest charges and of course late fees.

They increased your rate for the simple purpose of extracting more profits from you: If you continue to pay the same monthly payment as before, their profits increase because a higher proportion of that payment now goes for interest and fees, and it will take longer to pay off the balance.

A "good" CC customer keeps the balance maxed-out (so that the CC company can charge over-the-limit fees and collect maximum interest) and only makes minimum payments (indentured financial servitude for the years or decades it takes to pay off a balance via monthly minimums).

People who pay off their balances monthly or who pay substantially more than the minimum payments are actually LOSING money for the CC company (which is a good thing-the less people use CCs, the better-off the economy will be).

I actually checked my card today and it went down! I'm now at 9.99.

@davere: Chase just sent me notice that they're changing my terms on my card from a fixed 8.49% to Prime plus... well, they won't say what, but it can be anywhere from 0 to 24.99%, with a maximum total rate of 29.99%. In the same batch of mail, they sent me a card offer for a 0% for 1 year then 8.99% FIXED after...

Looks like it is time to start watching the statement.

I got rid of Chase for the same crap. I buy a house and they congradulate me with a 29.99% interest rate (was 6.99%). They said it was because I over extended myself with the house. Well, since there is 2 incomes paying for the house, I am FAR from over extending, and my balance on their card was 2k. That was paid off the next week, and chase was history.

@SScorpio: The answer is of course they'd jack up rates. And of course the missed payment would wreck people's credit scores.

But that's why Citi has the power to raise the rates and we have the power to bend over and take it.

It's only when we all reach a sort of Fight Club-like level of anger for the way they're being treated that things will change.

While a month of merchant fees foregone would be relatively easy for them to absorb, a month of accounts payable foregone would actually have them scrambling for solutions. One could be to say, okay, we will no longer act unilaterally to change your terms if you as consumers non longer act unilaterally to miss your payments.

This is really about power. There's an old saying (dollar amounts change over time) that if you owe $10,000 to a bank, the bank owns you. But if you owe the bank $10 million, you own the bank. It's all about reaching that tipping point, but the only way for individuals to get there is by collective action. Impossible, and probably illegal to organize. And that's a lesson in power dynamics for today.

The reason that some folks' rates are going -down- is because these companies are separating the chaff from the wheat. People who had trouble with their card are chaff and will get an increase if they don't opt out. But the company is betting (using their data mining software) that most of the chaff won't mess with opting out and sending certified mail and such. Sooo, that allows them to make more money on fees and interest and reward the true "wheat" customers with a slightly -lower- rate. It is pure evil.

dear citi cardholders,
thank you for generously contributing $20M per year to our baseball team in exchange for stadium naming rights for the next 20 years. if you wish to default on this agreement, please do so before opening day so that we can avoid the whole enron field scenario.
sincerely,
the new york mets

I find living without a credit card balance rather easy. Paying credit card interest is a form of financial insanity. I collect interest. I don't pay it. When times are tough, I just DON'T BUY ANYTHING that is not essential. After about 3 months of this lifestyle, I find it rather good. It has become a game. How little can I spend? How much can I save? Paying cash for almost everything makes you spend less. Pulling the greenbacks out of my wallet to pay is harder than throwing down the plastic.

I hope USAA doesn't start doing this, though it won't matter so much because my balances are still at 0% until January 2009.

@lastingsmilledge: I know your tongue is firmly planted in your cheek, but naming rights are just plain wrong. Ok, got that off my chest. Everytime a new yorker-with-a-citi-charge-card on the #7 train goes by the stadium, oh excuse me, 'field', they are going to get such a warm and fuzzy feeling from seeing the name that they'll go out and charge some more on the card. I guess the naming rights will now serve to remind people of what bank to not bank with (same for ING, TD Bank, too). By the way, there is also a citibank park on Long Island for a minor league team (the ducks, IIRC). They got the stadium for that park when they bought the bank (EAB, I think) that paid for the naming rights originally.

@Dawnrazor:

People who pay off their balances monthly or who pay substantially more than the minimum payments are actually LOSING money for the CC company

They still make money on every transaction you charge via the transaction fees that the merchant pays. Sure, they LOVE it when you max out your card and make the minimum payments, but they aren't going to lose money on the transactor-types either.

@humphrmi: I noticed mine went down a bit (2%) also. Not sure what is was - I suspected it was the average of several different rates I have for purchases (special offers, etc). Or maybe my rate is tied to prime? Unlikely.... and I didn't ask for a lower rate, so who knows. If they go back up, I'll be upset enough to call and ask them to lower it, and probably start using another card, but I don't think I would cancel it or let it expire. I guess I'm chained to the desire to keep the FICO score up & don't want the closed account.

My BOA credit card from MBNA jumped from 17.99% to 28.34%. I read the changes and opt out info too late. Needless to say I paid off that POS card.

@kwsventures: "save the greenbacks" reference to car commercial LOL

I am not a lawyer, but wouldn't unilaterally changing the contract like this render it null and void?
Might be interesting to see if they could still collect money from these customers if they just stopped paying.

@ameyer: Also, they promised Congress they wouldn't do this, so they potentially could be held in contempt of congress and/or face laws outlawing this crap.

@dweebster: Yeh, it must be good to be a hooker or blow these days ... (kidding, I'm sure it still sucks for both).

@Sasha_Pie: I'm with you there. I only carry one credit card, and I'm trying to switch to mostly-cash transactions. I think that'll force me to be more disciplined (and realistic) about my spending.

@flugelhorn: It shouldn't but if you have a balance on the card when your 0% expires then that may roll into a rate that was higher than was quoted when you signed up for your card.

@WolfpackJoe: bingo

Citibank can jack my rates up to 90% for all I care.

It doesn't really matter since I've had a zero balance on the card since 2004.

@humphrmi:

I try to pay off my Citi balance every month. I have an automatic $100 payment set up which covers the minimum and ensures I won't get hit with a late fee. But I set up the remaining payment myself. Once a year I might forget to do it in time or decide to pay a large bill over two months. So they probably only get $50 in interest out of me in any given year.

I don't particularly like this approach, but it's a sound decision on their part: the people they consider higher risk have two choices - pay a higher rate, which mitigates the risk somewhat, or stop using the card and start paying it down which also mitigates the risk.

Here's the weird part - I've been watching my credit card statements (Citi and Amex Blue) expecting them to cut my limits. If I charged everything except for mortgage, taxes and insurance in a given month it might add up to 3,000, yet between the two cards my limit is a staggering 46,500 which I think is crazy. On my most recent bill I noticed that Citibank raised my limit by $1500. I think they are out of their minds.

They're still doing the standard call-in-and-negotiate-a-lower-rate thing even with this, though. A co-worker just went from 15% (after the rate hike) to 8%; not spectacular, but at least it's not horrendous.

Like a few others said, they're probably banking on the fact that most people will either toss the notice or won't know to cancel or call in to request a lower rate.

Just got my notification in the mail. APR is increasing from 13.99% to 19.99%. On principle, I'm going to call and ask for a lower rate, even though I don't carry a balance. Simply an inappropriate way to treat someone who has constantly used a Citi card for the past 4 years.

(I don't carry a balance, I don't know if that makes me rare, but if so, an even less incentive for them to increase my rate, because they won't see any additional money from me.)