Friday, November 14, 2008

Citibank To Raise Interest Rates On Its Plastic

Citibank is raising interest rates on some of its customers, according to the Wall Street Journal. A Citibank spokesman confirmed the rate hike, but didn't specify how many people would be impacted by the increase. According to a Journal source, the rate change is expected to impact less than 20% of Citibank's card portfolio. Customers who are affected should expect to see rates rise by an average of 3 percentage points.

Need to write an opt-out letter to Citibank? Use this one (link here)

Citibank is just the latest card company to raise rates on its customers. Last month, American Express said that it would raise rates by two to three percentage points on some of its customers. Nordstrom, meanwhile, recently raised interest rates across the board (link here), applying the rate increase to every one of its 2 million customers.

From the Journal story:

"The industry has recently experienced an unprecedented market cycle with severe funding dislocation and significant consumer credit deterioration driven by the mortgage crisis and rising unemployment. In light of these unprecedented developments and others, Citi will be repricing a group of customers in our Citi-branded consumer credit-card business in the U.S. to appropriately manage these risks," said John Carey, chief administrative officer of the credit-card unit.

Citigroup's move follows a similar change by American Express Co., which is raising rates to some customers by two to three percentage points. Raising rates on customers is a delicate dance for credit-card companies. While the firms want to pull in more revenue from customers who carry a balance from month to month, they don't want to tip those customers into default because that hurts the card issuer's bottom line.

Customers can opt out of the rate increase. Those who do are permitted to use the card at the old rate until it expires.

Nice to see that Citibank is allowing customers who opt out of the rate increase to keep their cards at their old rates until the card expires (and the card is canceled).

If you do happen to receive a rate-increase letter in the mail, you'll see something like this. Hat tip: creditboards (click to enlarge):

Or this

Notice that customers will continue to keep their old interest rate even after the card is closed. That means that if you still have a balance on the card when it ultimately gets closed, you won't have to worry about the rate getting increased. You'll be keeping your current rate. Often, card companies aren't so liberal.

The Citibank Opt-Out Decision -- Everything You Need To Know (link here)

Editor's Note: I have now received a rate-hike notice as well. Read my story about it (link here). Also, where does Citibank go from here? I have some thoughts about that too. Read them here (link).

Anyhow, customers should continue to expect card companies to reprice their portfolios. At some point, I suspect that rate increases won't even merit a mention on my blog.

The rest of the Journal story can be read here (subscription required).

The New York Times, meanwhile, is weighing in on the rate hike as well (a day after the Wall Street Journal's story was published). Eric Dash reminds us that Citibank made a promise back in 2007. Writes Dash: "After pledging that it would no longer reserve the right to raise interest rates at any time for any reason, Citigroup now plans to start raising rates for customers who have not had an increase in at least two years." Eric is absolutely correct. That's a promise that Citibank did make. At the end of Dash's story, he leaves us with a nice quote from Carolyn B. Maloney. “Banks appear to be repricing cards for economic reasons — theirs, not their customers’,” she said. “Apparently a deal is only a deal when it doesn’t cost the financial institution too much money.”

You can read the rest of the Times story here. Despite Pledge, Citigroup to Raise Credit Card Rates, Blaming ‘Difficult’ Environment (link here).

Related Articles:

  • Opt-Out Letter For Citibank Credit Card Customers

  • The Citibank Opt-Out Decision -- Everything You Need To Know

  • Citibank's Rate-Hike Strategy -- Where To From Here?

  • Citibank To Raise Interest Rates On

  • U.S. Government Agrees to Citigroup Bailout

  • Citigroup On The Ropes -- Credit Card Customers Feeling The Pain

  • Change of Terms in Your Credit Card Agreement -- How Do You Reject The New Terms?

  • Sign Of The Times: Nordstrom Bank To Lift Interest Rates On Its Credit and Store Cards


    1. "At some point, I suspect that rate increases won't even merit a mention on my blog."

      That is because at that point, there may be some banks that will begin to offer lower rates!

      All they have to do is dangle the low-rate carrot, and someone, somewhere will come out of the woodwork.

      I'm sure there may be a few banks that don't have liar loans on their books that are looking for responsible users and not reckless abusers.

    2. The big banks seem to be in trouble across the board due to "bad bets".

      Many credit unions are in another boat it seems... fairly clean. My local CU brags that they have not as yet had one foreclosure on their books and offered me great rates on a variety of products. Of course they have never paid for "golden parachutes" or hugebonuses for exec... They are basically a not-for-profit enterprise which sets them apart from the greed in the big banking world. Many big banks are now paying for bad decisions inspired by blind greed. It is AMAZING that they didn't see this mess coming or realize that their actions from 2001-2006 would come back to haunt them.

    3. Virgil, the banks that you are talking about are actually credit unions. They're the ones that actually did underwriting during this era. They're the ones that actually requested proof of income.

    4. Spirit, the New York Times did a story last weekend on Merrill Lynch -- the rise and fall. Read that story to get a good idea of what was going on. Greed is exactly what drove Merrill into the ground. Ditto Wamu. Ditto Countrywide.

    5. Merrik, Juniper, and Chase all just lowered my rates a point each without me even asking..... and my credit is sucky.

    6. Drew, you likely got a decrease because of the reduction in prime rate. It's fallen significantly during the past month.

    7. My point being, Citi is obviously trying to save itself via it's credit card customers by raising their interest rates even though the prime rate has dropped.

      If someone with sucktastic credit like me can get rate decreases from other places, Citi's move is obviously not in response to the external market. They are just trying to suck blood from a stone.

      In unrelated happy news, I just zeroed out two credit cards today. Two down, $18k to go.

    8. Drew, congrats on paying down more debt, pal.

      Nordstrom just did the same thing. Prime rate has been going lower, and yet it raised rates across the board -- not just on its less-worthy customers.

      I really think this is just a sign of the times. The cost of borrowing has gone up -- and card companies aren't making as much money when they're giving us loans at prime (or whatever).

      Expect more companies to join Citibank, Nordstrom, and American Express.

    9. CM, the thing with Merrill is different though.

      Merrill was more preemptive than than anything else. With some creative moment among their different sectors they could have sustained. Their personal investment sector was doing great. Posting huge gains. Which is exactly why B of A wants them.

      But you are right -- it was all greed.

    10. Lion, did you see the NY Times piece I was referring to? I was referring to their HUGE bet on the mortgage industry -- and their love affair with risk. They ramped it up for even more gains. Greed. And Merrill, when it didn't want to be called on the carpet for the risk it was taking on, got rid of managers who questioned them.

      Read this story:

      It's an excellent read.

    11. Ah no. I missed the reference to the article completely.

      I tend to be very defensive of Merrill as I have a great friend who works for them. I go blind and scream "but it isn't her fault!" Lol

      You are correct though, they do have a nasty habit of firing those who disagree with the "company interests"

    12. No prob, Lion. I know what it's like to carry the torch for friends who work at these places.

      Merrill is lucky it sold out when it did. BOA overpaid (in my humble opinion).

    13. Oh BOA WAY overpaid for Merrill...that much is true.

    14. I won't pay the increase, Period. I will formulate a letter to citi telling them why i am not going to pay the increase. My credit report will take a hit, But I am not in need of anything for the next 5-7 years at least. This is extortion from the banks. If 90% of all card holders did that,, The banks would have no choice but honor the current rate the consumer has...After all some money is better then none. Wht should the consumer that is honoring there agreement be fined because Citi can't manage there funds, This about it. I have 3 cards from them, Never late, and always 20% over min. By the way, I have one paid off now for about 6 months, I will send that back to them. $10,324.19 to go.

    15. That is the problem with variable rates. The banks stipulate that they can change it when they want.

      Perhaps you could talk to them and close the card to hold the rate where it is now (prior to increase) and then pay it off? Sure you would take an age hit on your FICO but it would be better than a massive hit to your credit that not paying would. Plus, you wont get sued!

    16. If customers reject the new terms, they can keep the card open until the card expires.

      Anon, I understand your feelings. It does suck that these companies are raising rates. However, it does only apply to less than 20% of customers. There's a good chance you will not be impacted by this rate change.

      Additionally, congrats on paying off one of your cards. Well done. And when you eventually pay off that remaining $10K and change, let's celebrate. Be sure to come back here and whoop and holler. You'll deserve a pat on the back.

      Then, after we've done that, you can tell the card companies to screw themselves by never carrying a balance again. Pay in full from then on and never have to worry about interest rates again!

    17. Remember that a closed card still ages for FICO scoring purposes. The impact that closed accounts have is in regard to utilization. You lose the limit, which impacts your overall utilization. But closing a card does not impact the age of your history (at least not until the card falls off your report in ten years).

    18. Lion, even if you have a fixed rate, card companies can unilaterally up the rate. Fixed-rate cards are only good for the consumer when rates are rising. During this environment, variable rate cards are better (since they track prime).

    19. Heard on the Street story from November 15, 2008:

      Bank of America's Merrill Deal No Longer So Sweet

    20. CM has it right ... Prime is no longer reliably tracks banks cost of funds in this environment. Prime is a reasonable proxy for the Fed Funds rate (interbank lending rate). Historically there's been a strong tie between short-term commercial rates and Fed Funds. (And, as some have noted in the past, banks don't borrow at Prime.)

      However, greater uncertainties about borrower risk (commercial and consumer) have widened the gap between the two rates. The consequence is a squeeze on bank profitability ... when card rates tied to Prime have been decreasing while bank's short term borrowing rates haven't.

    21. find another card that will give you 6+ months at 0% for balance transfers! And use all your thank you points!! for christmas

    22. Its like the cost of flour is going down, but the bakery is raising prices anyway because some of thier other customers didn't pay thier bills. Imagine telling your customers that? I pay for my donuts why do I have to pay more because someone else didn't pay for them! Maybe I can go across the street at not have to pay extra?

      Citi raised my rate, but my card isn't going to expire for 1 1/2 years. By that time I will have paid of my card and the market will sette down and they can decide if they want to keep me or not. My guess is way before then, my rate will go down.


    23. It seems like a no brainer to opt out. They will still let you use the card until it expires and then they keep the old rate until you pay it off. The less risky customers are going to have the most options.

      I am not sure if this will work in Citi's favor in the long run. They will be alienating the less risky yet profitable customers(those that carry a balance and those that have options). If they are going after moslty the customers whom they haven't raised the rates on in two years than, they were proabably pretty good, savy shoppers. The one who can and will just opt out, pay off the balance and use another card.

    24. Frank, the problem is that the cost of borrowing has actually gone up for banks. Prime, meanwhile, continues to drift lower. When you get that mix, something has to give.

      And something is giving. Banks are saying that the spread has narrowed too much. Their cost of borrowing, coupled with prime rate coming down, has made it so that that banks can't make enough profit on us if they leave things at status quo. As a result, they're raising rates, even though you'd think that the cost of borrowing for consumers should keep going down.

      I guess what I am saying is that the cost of dough is rising. Lenders borrow at low rates and lend at higher rates. If they can't do that, then they're in trouble. That's why they're now hiking rates. They're borrowing at higher rates, so they need to lift our rates too -- so that they can maintain those profit margins.

    25. It's hard to say. At one point I would have argued changes like this would pretty much be a non-issue for people without balances, now it doesn't look like anyone is safe.

      It will be interesting to see what the 20% of customers have in common.

    26. Yes it will. I carry no balances with Citi. I have one card. Current APR is 6.65%. We'll see if I get a rate change. You'd think I am not the customer they're looking at.

      If someone gets an APR increase, make sure to chime in here. Want to see what kind of risk profile you represented.

    27. Jake, from what I read it is the customers that in the last two years have not had thier rates increased. If you didn't have your rate increased in the past two years, I bet you are low risk and price sensitive. Meaning Citi will end up losing revenue because they will move on. I guess it is game theory?

      They tried to raise mine 6 months ago, but I called up and had them lower it (what a hassle). I am not even going to try now, I am just going to opt out and pay it off.

    28. Just got the notice today. APR went from 7.75% to 14.9%. Dont really care tho. I used it twice in the last two years and have no balance. I have much better cards with significantly higher limits. I'll keep it open for age/utility. For reference, my ficos are all above 700...never late with them. Just one 30 day'r with Chase over three years ago...

    29. Anon, much appreciated for the note. This information helps me out. It gives me some context for the kinds of hikes we're seeing -- and the kinds of customers that are affected. With the exception of the 30-day late (more than three years ago with Chase), you still got targeted.

      What's interesting is that you keep no balances on your Citi card and you haven't used it much over the past two years. This rate change will have no impact on you. You'd think that Citibank would want to target customers that will be impacted.

      Thanks again, Anon.

    30. I have a Citi Platinum and mine was raised from 6% to 14.99%. This is really frustrating as I have a $3800 balance (my only debt). I always pay on time, usually early.

      I have a good FICO score (around 750) and only one other credit card (with no blanace), in additional to overdraft protection on a Citi bank account (also without a balance).

      Would it be a bad call to opt out? I'm concerned it would really hurt my FICO score. I'm determined to pay off this balance in the next 5 months, so I really want to avoid the rate increase.

      I wonder if I shouldn't transfer the balance to another card? Can I do that once I've "opted out" or should I do this beforehand?

      Part of my concern is that (good) new credit cards might be tougher to obtain in the next year. Any advice appreciated.

    31. Anon, let's look at this one issue at a time.

      You have a $3800 balance. It's currently accruing interest at 6%. If you decide to NOT opt out, the rate will go to 14.99%. Pencil out the difference.

      If you never paid a dime of the balance (impossible), and let that balance sit for an entire year (also not possible), you would pay $228 in interest for the year if you kept a 6% rate.

      If you allowed the rate to move to 14.99%, you'd pay $570 in interest for the year. The difference between the two rates, then, is $342.

      Of course, you'll be paying down the balance during the year, but I was just using those figures to put this into context. Because you plan to pay the balance in full within the next five months, I would imagine that the rate hike wouldn't ding you very much. Probably about $100-$150 in extra interest.

      If you opt out, your card will be closed when it expires. Until then, your account remains open.

      With regard to your FICO score, if you close the account, you could get dinged because your limit is no longer counted in your utilization ratio. However, if you generally don't keep balances on any of your other cards, it may not hurt you much at all. Account closures typically hurt people who are carrying balances -- and are already utilizing a lot of their available credit.

      Your account will remain on your credit report for about ten years after it is closed. As such, it continues to count towards the age component of your FICO score as long as the account is on your credit report. Remember, closed accounts still count toward age. It's only when they fall off that your average age of credit history is readjusted.

      As for moving your balance elsewhere, you would likely incur a balance transfer fee of 3% (that's standard). A 3% fee on a $3800 balance would result in a fee of $114.

      Finally, in this credit climate, it likely is more difficult to get a new card -- with a decent balance.

      Given that you would likely incur a balance transfer fee of $114 (if you did the transfer today) and the fact that you are likely to incur somewhere between $100 and $150 in extra interest as a result of this rate increase, I would -- if it were my situation -- accept the rate increase and pay the account off as soon as you can.

      Please don't take this as advice. I'm just giving you a glimpse into how I analyze stuff. After analyzing it, I've come to the conclusion that I would keep the account open.

      You'll have to reach your own conclusions.

      Best of luck, Anon.

    32. Many thanks for the tip and the different breakdowns. It's helpful to see how each choice affects the balance as well as the FICO score.

      Going forward, I think it's a good thing to have a few credit cards on hand.

      Thanks again...this site is a wonderful resource.

    33. Anon, thanks for visiting the site. Glad you're enjoying it.

      Having several credit cards is a good thing. I have written extensively about having backup cards. Now you see why. Diversity is a good thing.

      Hope you'll stick around.


    34. From a reader (posting in a different section of my blog):

      Received Citi letter today:
      1)was 8.99% APR for purchases,will be US Prime+18.99%,that mean 24.99% APR
      2)very interesting part:cash advance APR will be the same as purchase APR..?
      3)Transaction fee for foreign purchases-3% of each purchase...
      Have no idea,how Citi evaluates credit risk,but my credit profile is like this:FICO's from 721 to 744,have 4 Citi credit products totaling U$D 59000,currently utilized less than 1 % of available credit,never late or any other derogatory items.

    35. And my comment:

      Anon, that's amazing. I'm amazed that Citi would give you that rate given your FICO scores and your overall utilization. Don't know what to say.

      I have 1% utilization across all of my cards. Scores are between 765-780. Didn't receive a Citi letter today. Hope I don't. But your situation should make everyone worry.

    36. All-
      Very interesting and informative site. Thanks for all the insight. I do have a balance on a Citicard and they raised my rate to 14%. I have never missed a payment and also have another Citicard that did not experience a rate increase. I have a balance on that card as well. I am not sure how they are assessing the rate increase.
      I think the concerning thing from an economic point of view is the fact that the credit card companies will rate increase themselves into bankruptcy. If the 20% that receive an increase cannot afford to pay the increase, how will Citibank recover that loss? I am certain they will drill down into the rest of their credit holders for more interest but that can only last so long. Isn't it more lucrative to lower the rates for all and get a larger return? I think it would provide a really necessary reprieve to an ailing system and Citibank could be a leader in this effort.
      In this economic climate any return is better than a loss I would think.


    37. Lisa, thanks for posting. Glad to have you here.

      Citibank has a liberal opt-out process. Even if some of its customers cannot afford the new rate, they can always opt out -- and keep their lower rate. It may turn out that a lot of customers will be forced to go that route.

      As for keeping interest rates low -- and producing better payment numbers -- intuitively that makes sense. But these card companies most certainly have better computers than we do. They must, you'd think, know what kind of losses they'll suffer when they lift rates on a group of customers. They're probably betting on the numbers. While some customers will certainly be thrown over the edge, other customers, even with the higher rates, will continue to make their payment (even if it's a struggle).

      All of that said, maybe I'm giving the card companies more credit than they deserve. So far they haven't exactly been on the ball or on the top of their game.

      We'll see how this all turns out.

      Stay tuned is all I can say.

      Thanks for chiming in, Lisa. Appreciate the input on your credit-card APRs.

    38. No problem. I find it frustrating and interesting at the same time. I have sent my concerns to the Senate Banking Committee. I know they are inundated with issues however, some of this seems to be common sense. Computers can evaluate risk but in the end one has to think about the human part and the best way to make money. People will default on an unsecured loan in a heartbeat if it compromises their home or purchase of food. Interest rate increases seem counterintuitive to me.

      I will keep tuned in as this is truly an informative site. Thanks!

    39. Citibank has more than 50 million customers, Lisa. It's tough to get a human element involved when you have that many cardmembers.

      But I can't argue with you. It would almost certainly be better if these card companies could employ the human touch more often.

      To be sure, you're correct about defaults. People will definitely buy food before paying for their credit cards. As for the home, well, there was a story in the Wall Street Journal (I believe) talking about people letting their house payments go late before their credit cards. Yikes!

      I can't remember if I did a blog entry or not on the topic, but I'll see if I can dig that story up.

      Thanks for visiting my blog, Lisa. Hope you'll become a regular contributor. New readers -- with thoughtful comments -- are always welcome here.

    40. This USA Today story mentions that cardholders are paying credit card debt before mortgage payments.

      Quote from the story: "And more borrowers are paying their credit card bills before their mortgage bills, credit bureau data reveal, an alarming shift that suggests people are walking away from mortgages and using credit cards to get by."

      But I know there was a bigger story that actually centered around this phenomenon.

    41. CitiFlex credit line agreementgoing to change too....Late fee will be $ 49:)))and read following:''we may extend the payment term of a transaction at our discretion.If we do,we will recalculate the payment due amount on that transaction to reflect longer term.This will likely increase the amount of finance charges you will pay on that transaction...''
      How do you like that?....

    42. Anon, very interesting indeed. My Citi Flex account was closed in September for inactivity. See my story here:

      Very much appreciate the heads up. So you use the LOC, and choose a particular monthly payment and term. But then Citi comes along and actually extends the duration of the loan -- thereby lowering your payment, but increasing the amount of interest you'll pay during the life of the loan.

      Not good.

    43. Wow, 50 million customers. Lower rates could really help them bring in more money. The human element isn't by individual but by the norm. Human behavior isn't too difficult to predict.
      I can't even fathom paying a credit card before a house payment but I am certain they probably want access to cash that they don't have in the first place which is a total risk (and loss). There is no way to mitigate that risk after the fact. Indeed, interest rates may be part of that problem.

      I do think you could prior to offering credit but that is way too involved for this post!

      It would be interesting to see the profile on those individuals and the percentage that exist.

    44. Lisa, at some point, feel free to wax eloquent with your idea of true underwriting, which is what I think you're talking about.

      And it would be interesting to see the profiles on those people.

      Also, I think that's exactly what's happening with these people who are making card payments before home payments. They are stretched to the max. They'd rather walk away from the home than be hungry. Thus, they're using the cards for daily essentials.

    45. "As for the home, well, there was a story in the Wall Street Journal (I believe) talking about people letting their house payments go late before their credit cards"

      Credit Matters:

      Is this the article?

    46. V, that's not the story. But thanks for the link. And thanks for bringing a smile to my face. I know the reporter very well. She used to be the business editor at the Chronicle.

    47. Still,in this kind of credit enviroment some banks are giving CLI's.Last week got an unsolicited CLI from BoFA of $4500 and no fee balance transfer offer US Prime + 0%,HSBC GM card raised credit limit in amount of $3600.Also had CAP one CC from long long time ago with $750 credit limit,guess what?...They became ''very generous''and gave $250 many many years.

    48. It's getting a little hard for to keep track of all these bailouts. LOL!

      "I know the reporter very well. She used to be the business editor at the Chronicle."

      Kathleen Pender? She's not at the SF Chronicle anymore? I must've missed the memo!

    49. Anon, thanks for the comment about CLIs. Last month I wrote a story about the market not drying up -- at least not drying up for good credit risks. There is always a bull market somewhere, right?

      Thanks for the reality check.

    50. Vibe, she's still at the Chronicle. She's now a columnist. She used to be in management. She was the former business editor.

    51. Lisa, to be exact, Citibank has some 54 million active credit card accounts. How's that for a lot of cards floating around??

    52. CM:

      My bad on Kathleen.

      I should've known better.


    53. Vibe, no worries. I'll keep track of the reporters for ya. I've got you covered there.

    54. I just received my Citi Dividend Platinum Select statement with the "Notice of Change in Terms".

      My APR is being increased from 8.74 to Prime Rate plus 8.99, with a minimum of 14.99.

      I've got an $8800 balance on the account. I haven't been late on any bills for six years. FICO is somewhere between 660-700.

      I also have a Citi Diamond Preferred Rewards card but I haven't received this month's statement yet.

      As soon as I got the notice, I Googled around in order to find out what was going on. That's how I landed here. You've got a great blog.

      Hope my info helps regarding your attempt at understanding the 20% profile. (If it really is only 20%)

      Hope my info adds to

    55. Scott, thanks for the comment. Much appreciated. I'm glad that customers are posting this information here. Gives us some idea of how wide Citi is casting its net.

      Also, glad that you found my blog. Hope you'll become a regular reader.

      Thanks again.

    56. I received two separate notices today from Citibank stating that my interest rate would be increase by 230% on a card I have had for about two years and 152% on a card I have had for 15 years. I suspect that they are going to increase the rates across the board. I can't understand how I could be one of their best customers yet be one of the 20% to have the rates increased. I think they are trying to pull a fast one on all citigroup customers. Why should I be paying for their bad financial choices? I have great credit but opting out of these increases would really hit my credit score hard, on the other hand I can't afford to pay these ridiculous increases.
      I called them and they also say the Prime Rate is estimated to increase to 6%. If you read the fine print on the rate increase notice they lock you in to the new rate whether the prime rate increases or not by stating a minimum interest rate.

    57. Anon, what are the actual interest rates on your cards now?

      Also, what they're talking about is lifting your rate floor. Regardless of how low the prime rate goes, your interest rate is not going to follow. So, sounds like Citi is saying that 6% is the floor. Even if prime is 4%. You will be pegged at 6% plus the margin.

      Another point: we'll never know just how many customers are being impacted. A source says less than 20% are impacted. IT could be 50% and none of us would be the wiser.

      So far, meanwhile, I have not received a notice of change. Maybe I will escape the increase.

    58. I found this blog by doing a search on google for Citi raising rates. I had heard something on the news and wanted to check into who the 20% might be. I'm just assuming I'll be in that lucky group...that just seems to be the way things happen for me lately ;)

      My question as far as their 'generous opt-out' to close the card and keep the rate at its current level. Is that until the balance is paid off over time or does once the card expire, the balance would be due in full?

      Sorry if a stupid question...I've just never even had to deal with the possibility of my rates being increased. Two Citi accounts now are at 6.99 and 7.99, respectively. If they double my rate, that is going to cause a concern. I'm just trying to prepare in advance.

      Thanks (and very interesting reading here!!)

    59. Anon, glad you found the site. I have seen a big spike in traffic of late -- especially from Google.

      To answer your question: if you do decide to opt out, your card remains open until the expiration date on the card. Once the card expires, the card is closed and it will not be renewed. IF you still have a balance on the card when it gets closed, you continue to pay the card off at your current rate -- whatever that might be. You will not get your rate reset to the higher APR.

      My source for this information, by the way, is Citibank. I called and asked about your scenario.

      I hope that answers your question.

    60. Thank you very much for taking the time to answer, let alone call Citibank to pose my question. I'm guessing if I do get hit with the increase, I should probably get the opt-out clarification in writing, notarized, and sworn under oath from Citi judging how they've 'kept' their word so far? :) :)

      Thanks again!

    61. Well, you can see an example of the letter in my story. That comes directly from a Citibank customer who received the letter.

      But, yeah, don't hold Citibank to anything. A deal is a deal until it isn't. :)

      You are welcome for the answer. Glad I could be of service.

      Hope to see you around the site.

    62. It is interesting to see the variances in customer handling by Citi. I recieved an email today indicating my rate will be reduced in December based on Libor. It would seem that with 54 million customers we can have some sort on influence on how a corporation behaves. My question is: how do we make that happen?
      Underwriting is kind of my concept but that is based on risk. In the current environment risk cannot be evaluated as it has been in the past. How can Citibank make money and at the same time alleviate consumers from defaulting? My first inclination is to charge a flat rate for all at about 9%. The 9% is a wild guess based on the impending decrease from the feds. I think the decrease from the feds will have little impact. It is close to zero now. Any ideas? I really want the business to succeed and also want to see people be able to pay obligations. There has to be a way to balance it.

    63. Lisa, I wish I had an answer. It would take a mass exodus for Citibank to change its ways. For now, these card companies are still adding plenty of new customers for every customer that walks.

      Indeed, during the third quarter, American Express, despite all of the negatively publicity, added two million (NET) new cards.

    64. True enough, however, again, risk comes into play. Citibank is engaging in a business practice that will lead to demise. 54 million customers doesn't equate to "paying customers." It is really concerning to think any card company would be requesting new customers when the focus should be on recouping loss.

      Amex also filed as a banking institution to weasel into the bailout. They should have cash to play with if it is approved. Wow, the rich get richer! I have a relative that works at Comerica and they recieved a bailout even though they had not suffered significant loss. I really need to file as a bank.

    65. Yes. We should all be bank holding companies. Seems to be the way to go. That's exactly what Amex did. Grabbed a cool $3.5 billion in the process.

    66. We do have a money tree in the backyard (according to the kids) so I think we should be eligible for a bailout!

    67. Fill out the forms, Lisa. Let's see if we can't get you approved.

    68. I am there!

      In all seriousness, I really do believe we can negotiate a change. I am working to understand the implications and it is pretty complex. I deal with many issues that compromise budgets and sometimes (especially now) we really have to step way outside the lines and not think business can function as it has in the last 2 decades. Doing the same thing year after year will not work.

      I live in MI and the auto industry bail out( or not) will be a certain indication of how we all will have to change.

      I really think, collectively, consumers have better ideas on how it can work if we can influence those that "hold the purse strings". After all, we are the ones that support the efforts. Sometimes I think we are so detached that we give up. I am thankful for your blog. Great insight and gives me pause for thought.

    69. Lisa, I appreciate your comments. You're sharp. Glad to have readers like you.

      I can't add any more than you already have.

    70. I will let you know the responses I receive from some of the corporate "partners" I am attempting to influence. I am not certain it will be effectual however it is always worth some effort. I just see too many people that have to make the decisions between food, gas and house payments. We have to be able to manuever the credit market.
      Have a great night

    71. Lisa, have a great night yourself.

      Thanks for posting today.

    72. I have Citi World Platinum Mastercard (like VisaSignature CL is not reported). I found a note in my latest statement - We are increasing ... with a minimum APR of 18.99%. I whad 11.99%. I always pay in full and my last FICO score was 750+. Generally speaking, I am interested in cache rebates. I really don't care about APRs. However, I think I have a problem with this increase. My card will expire in 2011 (!) and maybe it's time to send a message and opt out. By the way, I got a similar note from Discover two days ago. But Discover *decreased* my APR from 11.99% to 8.99%! I think this whole thing is telling more about Citibank than our credit scores. Thanks for a nice blog.

    73. Robert, you hit the nail on the head with the last comment you made. Citibank has some serious issues. I know the stock price doesn't tell the whole story, because investors could be wrong, but it is off nearly 80% over the past year. It's now at $6 and change. This is a sick stock. I think it's a sick company too -- despite the fact that its CEO says that it is in better shape this year than last.

      Rate increases likely tell you more about the company than its customers. You're proof of that. A PIF customer with a 750+ FICO score.

      There are others who fit your profile who say they've been jacked by Citi as well. This makes little sense to me. You don't go after your best customers unless you're desperate.

      Thanks for the comment, Robert. And thanks for visiting.

    74. I have a Citi Platinum Select Mastercard and I recently received a rate increase notice in my monthly statement. I have been a Citi customer for 4 years and my rate has always been 8.9%. The increase will take my purchase APR to 14.99%. My FICO score is 740 and I have never had a late payment to a creditor in the 17 years I've had credit. I have carried a balance on this card in the past but I just paid this card off last month. I have 3 other credit cards with APR's under 10% so Citi will be the last card I use now (if at all). I just wanted to post my info so you can see the group of customers Citi is targeting.

    75. Anon, thanks for the post. This is all very fascinating to me. Many of you guys have excellent FICO scores and have never been late with any creditor. And yet, you're still getting these increases. If you are among the 20%, I'm amazed. Who isn't seeing an increase? My FICO is about 780 on EQ. Is that what it will take to avoid an increase?? Sheesh.

      Thanks for the post, Anon.

    76. We received the notice of increase from Citi, 8.9% to 14.9%. We carry a balance so this increase practically doubles the monthly finance charge. We opted out the next day after receiving the notice. The process was pretty simple. When push comes to shove, credit cards are unsecured debt so the creditors really don't have the upper hand unless you really need the credit. I've never had a late payment and have a solid FICO score, but if we have to retrench in this downturn paying credit card issuers is not a top priority.

    77. Anon, thanks for the note. I'm pretty amazed by some of the rate hikes. I am about to repost something that one of my readers wrote some place else on the site. This person's stats are excellent, and yet this person still received notice of a rate hike.

      I'm pretty surprised.

      You're right, though. This is unsecured debt. It's a low-priority debt in the grand scheme of things.

      I appreciate the note. I'll likely write a story based on the information I have received in my comments section.

    78. Repost from another user on the site:

      Anonymous said...

      Very timely. I just got a notice TODAY regarding my 21 year old citicard. I have never carried a balance on this card, have a credit score of 785 (I checked fico today) on the report they checked and PIF on this and all my other cards. Never late anywhere on anything, nothing negative ever on my reports.

      The notice said that as of 11/28 they are raising my rate from 8.99 to 16.99%. I guess I thought I was immune and was really shocked. The notice said though that if I call to opt out of the increased interest that the current interest will stay in effect until the card expires and then the account will close. I don't want this account to close because it is my oldest card. However, I did remove it from my wallet today and will use in only for a small purchase each month online to keep it active.

      The credit crunch is trickling down my friends even to those of us who have done nothing, zero, nada risky.

      Creditmatters, would you even bother to make a phone call on this to complain? I don't carry a balance anyway but its the principal of the thing. I'm thinking its best to not call because I'm afraid the rep may misinterpret what I'm saying and think i'm opting out and then the card will automatically close in 18 months when it expires. I think i should just leave it alone and not take that risk expecially since its an old card and has a huge limit on it.

      New time, and I think this is just the beginning...

    79. Anyone starting to wonder just what Citibank is up to?

    80. Hey CreditMatters,

      Dropped in just like so many have via Google. Got my rate increase today on one of my cards. 13.99% to 19.99%. Never made a late payment, carry a medium-sized balance. As much as I'd hate to hurt my credit score, I'm seriously considering closing out all of my Citi accounts. Surprise rate increases like this are just obscene.

      And I can't help but wonder if in 5 years anyone will be caring about their FICO score anymore, the way things seem to be playing out these days.

      Great blog, def. going into my bookmarks!

    81. Anon, thanks for dropping by, pal. Nice to see my Google-search friends stopping by to drop a note regarding their Citibank cards. We're all in this together, so the more information we have -- the better.

      Anon, I only recommend that you simply take the most logical route when you decide whether to close the accounts or not. You have a balance right now, which means that you have a choice to make soon. Do the math and figure out what it will cost you in the long run to keep the card open. Consider what it will cost in terms of lost utilization (cushion) as well.

      Once you've done that, then you're ready to make your decision. Given the climate, it likely won't be easy to replace the limits that you'll be shutting down. Closing cards doesn't hurt the age component of your FICO score, so that's not a consideration (for now). It's the utilization impact that we worry about.

      If you close all of your Citi accounts, would you have enough available credit elsewhere?

      Anon, I appreciate you stopping by. Come back often. We have a lively group of readers here. Very professional, too.

      If you don't mind, follow up on my question if you get a chance.

    82. CreditMatters,

      Anon@6:48pm here again, I'll have to create an account if I'm going to keep posting :)

      In thinking about this a bit more, I may close all but one account I hold with Citi--and keep the highest credit-line account open. This is less about me avoiding the rate hike and more about me wanting to send a message. If they won't play fair, I'm not going to do business with them. Sending a letter doesn't feel as good as telling them that I'm closing out accounts--followed up by paying them off as fast as possible.

      In terms of a cushion, I have enough to fall back on if times get rougher.

      Thanks for pointing out the age-window in the calculation of FICO. I hadn't realized that!

    83. Anon, let me make a suggestion, then. Do not close your accounts without first combining your credit limits. In other words, if you have a $5,000 card with no balance, don't close that account. Just take the limit from that card and move it to the card that you plan on keeping for the long haul. No point in handing the limits back to Citi when you close the card.

      Here's how I'd do it (were I going to close all but one). I would allow the oldest card account to be the survivor (that way it stays on your report in perpetuity). The closed cards will eventually fall from your report about ten years from now.

      I would take all of the limits from my cards, and move them to that oldest surviving card. So, if I had $65,000 on four cards (the ones that I am going to close), I would move those limits over to the surviving card, which would give me a huge, fat limit on a single card.

      You get some satisfaction from closing the cards, but FICO doesn't hurt you in the process. You keep your limits (on a single card) and slam the door shut on your remaining cards.

      At the end of the day, everyone is happy. You keep your limits. FICO thinks you're awesome. And Citi doesn't lose you as a customer.


    84. Hello...I just thought I'd share here before my head exploded. I called Citi to opt-out of two of my three Citi accounts. The CSR was looking over my online file and remarked how I was such a good customer and that Citi was only doing what they needed to do to stay afloat. She actually said "Just like I pay $4 for a gallon of milk, the price of everything is going up." Seriously??!! Then she proceeded to try to upsell me their credit protection plan, first 30 days free, that would "allow" me to defer my payment if need be. I literally couldn't speak for a minute. I opted-out only because I refuse to go from 6.99 and 7.99 to 14.99 and 15.99 respectively. Never late/never missed a payment! This is not how you treat "great customers". If I had the means, I'd pay them both off in full, but that's not in the works anytime soon. I feel bad for my most excellent FICO taking the hit, but I bought my home 4 years ago, and DH and I both have cars that are paid for and won't need to be replaced in the foreseeable future, so I can't think of any reason in this climate where my FICO score dropping some is going to keep me awake at night.

      I am glued to your blog! This is like nothing I have ever seen or heard of before, and I've been a credit consumer for over 30 years! Citi has got to be ready to go under to do this to their "great" customers!

      Thank you for doing what you do....excellent advice and viewpoints given here and just the simple comfort of knowing I didn't do anything to cause this craziness with my accounts.

      Thank you!

    85. Anon @8:18pm, welcome to my blog. Nice to have you here. I love to discuss this stuff, and I'm staying right on top of this crisis, so you should stick around and become a regular contributor. The more the merrier around here.

      Now, let's get to your situation. Even though you opted out, your cards remain opened until your card expires. That's the good news. The bad news is that you're now in a race -- to pay that balance off before the card ultimately gets closed.

      Why? Because closed cards -- that have a balance -- often hammer FICO scores. That's because the credit card companies typically report the limit as $0 once the card is closed. When that happens, any balance on the card will make the closed card appear fully maxed out. So, that's why I say it's a race to pay that thing off before it's ultimately closed.

      As to being a good customer, you can see from this thread that there are a bunch of you guys in the same boat. All good credit scores. All good payment histories. And all doing what you should be doing. And yet, Citibank is sending you notices that your rates in some cases are more than doubling. Yikes. I am monitoring my own mail here, just waiting for something from Citi. So far, I'm lucky. No mail from them.

      In an earlier post, I mentioned that people should take their limits and combine them with cards that will remain open at Citi. You can only do that when you have a $0 balance on the limit that will be moving. Therefore, right as you're paying the card off (and right before the card is closed), I would recommend that you take the limit from the opt-out card and move the limit to a card that you'll leave open. Citi will just love you guys. Haha.

      Tomorrow I will be writing an independent story about these rate hikes. I'll be using a lot of material from the comments in this thread. I think I have enough information now to at least write some anecdotal things.

      Anon, hang in there. Get that balance paid off as soon as you can -- and definitely try to get it paid off before the card gets closed.

      Here is a link to a story I wrote about closed cards and FICO:

      Welcome to

    86. Scratch that. Will likely write a story on this situation after I have received more comments. I can see from my Google traffic that people continue to find this story. I don't want to fracture the information by writing yet another story on this topic. I'll continue to monitor this thread.

    87. Hi,I posted in the other thread and you moved it here. I'm the one with the 785 credit report and 21 year old citi card and you told me to call them.
      Well I just did call them and asked for a supervisor like you recommended. He looked over my account history and did a soft pull and told me that I was an "outstanding customer" followed by there was nothing he could do other than opt out. I told him no, I do not want to opt out because its my oldest card and I want to keep it but that I was disspoitned in how they were treating their best customers. He then went on about how Citi is trying to stay afloat in this climate and expect to see such changes from othe big banks soon. Yikes, makes me glad I PIF each month.

    88. I want to add that even though I'm going to keep the card open, they will be losing lots of money in transaction fees from me because this has just been moved down from a high use card and one of my favs to a pull it out once a month for a small charge like a dinner out and pay before it hits the statement cards. Blech to Citibank!

    89. Amazing, Anon. Thanks for the follow up. I'm glad you PIF, too. I feel bad for all of those who are currently carrying balances -- and can't opt out for whatever reason.

      You'll be fine, of course. Your scores are strong and you PIF.

      Best to you, pal.

      And thanks for participating here today.

    90. Glad to help. Its scary how they are jacking up those with balances that can't pay and don't have other options. I'm glad I called, it was a mixture of glad its not personal to me but also disgusted how they are doing business today. I can't get over how they crashed on wallstreet today.

    91. You need an edit funtion :) Wanted to also add I checked truecredit after the phone call and did not see any new hards. I wanted to check it really was a soft.

    92. I probably do need an edit function, Anon. Just another thing to add to my list. Haha.

      And, yes, it's not personal. Citibank just sucks right now. It's not necessarily its customers.

    93. Found this via Google as well.
      FICO in the 750 to 780 range, but we have a 16k balance (with 13k still available). We always pay 3 to 4 times the minimum payment, and they are raising our rate from 6.9% to 14.9%.
      Our cards expire Dec 2010.

      We have an empty credit card with a 12k limit at Wells Fargo... I'm very tempted to opt out, see how much we can pay down in the next 2 years, and then transfer the rest just before the card expires. The only problem is that our utilization is going to really suck at that point.

    94. Anon, interesting choice you have there.

      My guess is that, if you're paying 3-4 times the minimum, you should be able to pay it off in time (if you decide to opt out). The problem is that you'll ultimately lose that $29,000 limit card.

      Sounds like you don't have a lot of backups beyond the WF card? Maybe in the next two years you'll pick up a card here and there. Do you have any credit union cards? My two credit union cards are especially generous with the limits. Penfed and Nasa.

      Something to think about over the next year or so.

    95. CreditMatters,

      This whole Citigroup thing is getting stranger by the day. It sounds as if like they're not as well capitalized as they claim (even w/the TARP infusion). I think serious concerns about their off-balance sheet holdings have contributed to the sharp and serious decline in the stock price.

      As I'm sure you know, many institutional investors will be forced to sell shares if the price remains under $5.

      I'm guessing that Citi, in a desperate attempt to remain solvent, decided (a few weeks ago) to double the finance charges on many of its customers in good standing. I'm also highly sceptical about the 20% figure the company cited with regard to those affected.

      If things continue to get worse for Citigroup, Sec. Paulson may be in for another working weekend.

      Who knows, I could be sending my next CC payment to GoldmanCitiSachs or Morgan Stanleygroup.

      I'd be interested in your take on the larger picture.

    96. Scott, let me tell you something, you're really spot on here.

      You're absolutely correct about institutions having to sell if Citibank is below $5. Many institutions simply can't own stocks that are below $5 (what used to be called a penny stock).

      What's more, I really wonder what's going on with those off-balance sheet holdings as well. I can only imagine what those things are worth ($0?).

      Additionally, I am now quite convinced that more than 20% of Citibank's customers are impacted by this rate increase. Look at the readers in this thread. We have one reader with nearly 800 on FICO and carries no balances. Hello! Who is safe if this reader is not? And let's get real, Citibank's mainstream customer is not sporting a 785 FICO risk profile. Something's wrong here.

      Scott, how bad does Citibank wish it had Wachovia now?

      Now, all of that said, Citibank raised $50 billion in capital this year -- plus grabbed an additional $25 billion under TARP.

      WTF is going on here? Why is the stock getting ripped? We may find out sooner rather than later. I certainly don't have the answer but something's going on.

    97. All
      There has to be something we collectively can accomplish here. I really believe that we can influence how we are being handled in this environment.
      Unsecured loans should be the easiest to negotiate. What is the worst that can happen if we don't agree to the terms? FICO will have to be adjusted to the current market and climate. I can't see the FICO being of any value in the next year. They will have to totally revamp assessments.

      I am really tired of the large institutions benefiting (bailouts) and us taking the hit. This blog information would be a great resource for senate testimony (this would be YOU Creditmatters :). We could certainly file statements. Do we really want additional bailout cash to go to the credit companies while we are taking a hit? This seems to be lost in the current financial upheaveal.

      BTW if you didn't notice GMAC filed for bank status today. I am so thankful they may get some of my tax dollars!!

      Great info..thanks so much

    98. Lisa, thanks. Didn't even notice that GMAC filed today. Guess it will be partaking of TARP as well, ala American Express, Goldman, and Morgan Stanley.

      This thread is turning into a gold mine of information. I figured that, if Citibank really was lifting rates on less than 20% of its customers, that we would see lower FICO scores in here. So far, I am surprised by the much higher scores.

      Where are all the low FICO folks at?

    99. Citi's $75 Billion in capital pales in comparison to its "$1.1 Trillion Mysterious Asset" problem, no?

      From a Bloomberg piece in July...

      "Nowhere mentioned in the accompanying 66-page handout were the additional $1.1 trillion of assets that New York-based Citigroup keeps off its books: trusts to sell mortgage-backed securities, financing vehicles to issue short-term debt and collateralized debt obligations, or CDOs, to repackage bonds."

      The lack of transparency in the banking/finacial system is pretty frightening.

      Tomorrow should be interesting.

    100. Nothing worse in banking than a lack of transparency. This stock could easily slide to $3 tomorrow. Moreover, because it's a Friday, look for everyone to go home flat. No one will want to be long this stock heading into a weekend.

      Gonna be interesting.

      Thanks for the Bloomberg link, Scott.

    101. Hey CM, like alot of people here I found my way here after getting a letter from CTI on one of my two cards with them. I do carry a balance unfortunately on both of them. They are hiking me from 8.99% to 18.99%. I have a 700+ score with no late payments except one to Chase over 6 years ago.

      Now my question... Most of the balance on that card is at a even lower offer interest rate since it was transferred for another card. Is that portion of the balance going to be affected? The way I read the notice is that the Standard APR is jumping up but that offer still stands?

      Thanks for you help this blog has been sooooo helpful!

    102. You said, "Where are all the low FICO folks at?"... my guess is that the rate jump wasn't as much as a surprise to them as it was to us. I couldn't believe they were seriously jumping us from 6.9 to 14.9%, so I went searching and found this page.

      I'm the anon with the 29k limit card... yes, we were very happy to get down to the point where we only had 2 credit cards, and one of them we kept at zero balance. I don't have a lot of faith that we can actually pay off the whole thing in 2 years, but we are going to try.

      We do belong to a credit union as well... I guess we'll see if we can get a credit card from them.

    103. Duke, what you need to do is call Citi. See if your promo rate is affected by this change. It shouldn't be. Only your standard APR should be seeing the change.

      But call to make sure. We're guessing until you call and confirm.

    104. PE, I wrote a story about credit unions back in July. You might be interested in reading it. Good information there about why we should all have a credit union relationship. These rate hikes by the big banks just drives my point home.

    105. Hi again, Anon who posted earlier at 8:18. For Lisa, I would be interested to know what you are proposing as I have spent the last 3 hours just churning in my stomach and my mind at how someone like me who has great credit is being basically raped by Citi's 'accept this increase or else' mindset. I am one who had my payments on bill pay reminder from my credit union checking account because I had always feared being late making a payment and having my interest rate get jacked as a result. For this to happen because Citi has it us consumers don't? is just beyond galling to me -- especially with the financial bailout. All these financial companies with their hands out, and the regular schmoe consumer is left to deal with the fallout, all the while WE are the ones footing the bill to bail them out? It's just beyond frustrating to me.

      I did opt-out of my 2 Citi cards that got jacked and I did draft a letter to my congressman who is on the financial securities committee, but really...there is strength in numbers vs. little old me trying to just stay above water.

      I just feel that corporate America has absolutely no shame left with the way things are going. Weren't all of us old-timers taught pay your bills on time, build your credit, use it wisely, and all will be well? Who knew we would become targets of a mismanaged financial institution. The thought of my and everyone else's here tax dollars helping to bail out financial institutions who are willing to take actions such as Citi is just phenomenal to me. I'm almost 60 years old, and have lost the last of my innocence concerning do the right thing and all will be well for you.

      Sorry for the's just reading everyone else posting the same basic situation as myself...not one credit risk in the bunch. Why wouldn't Citi add a token 1% increase to EVERYONE if that is what is needed? I hate to think what they are doing to their high-risk customers.

    106. Okay so I didn't expect them to be open, which is why I asked... but they were. The change is only effecting the Standard APR not the balance transfer offer APR.

      That is not that big of a deal for this card because I could probably have it paid off by the beginning of the the new year. But if I get this same letter on my other CTI card where I carry most of my credit card debit (I recently transferred all of my other balances to it) it is nice to know that the offer APRs will stay low for their terms. I was planning on paying them off anyway before they expired... this now just gives me more incentive.

    107. Anon@midnight, hang in there.

      I understand the frustration that you guys are feeling. About three years ago, Chase rate jacked me to 29.99%. Thank goodness I had the money at the time to pay the entire balance off. But it was a real eye opener. My innocence was lost at that point.

      I aimed to turn the tables on the credit card companies at that point. I vowed to never carry a balance again. These card companies have no power over us if we are not carrying balances.

      Now, I understand that many of my readers are in fact carrying balances. I'm just hoping that after they've opted out -- that they are able to pay the balances down without a problem. Then, I am hoping that they'll never carry a balance again.

      I know that won't help now, but I am putting it out there as a goal for everyone. Cards are not evil. They are tools. We all simply have to master our tools. I am convinced that we can only do that if we're not at the mercy of these card companies.

      Your parting sentence is an interesting one. What is happening to the highest risks right now? My guess is that their rates are already high -- which reflects the high risks that they are. There is no telling if they'll opt out.

    108. Duke, good. That's what I figured. Get those balances paid off before the promo ends and you'll fare well.

    109. Headline from Wall Street Journal: Citi Weighs Its Options, Including Firm's Sale


    110. I recieved my letter of increase today. My rate is ~7.99% now it's LIBOR+11.99% which according to them was 14.99% as of Sept. 27. I carry about a 10k balance on a limit of 20K. Haven't had a late payment in over 5 years with them or any thing on my credit. I shopped around for a car recently and only saw to FICO scores which were 752 and 721. Been chargin a lot on that card for the last 6.5 months because I was laid off...mostly gas and food though. As far as I can tell it will be a $50 increase in payments monthly.

      2-3 point increase my rear.

    111. Yep. It ends up taking your interest from roughly $800 a year to nearly $1400 a year (assuming you never paid a cent; I use this method just so that we can see what the interest would be on a balance that remained the same for an entire year).

      Anon, good luck getting back on your feet. Good luck on the job front. Hope you find something quickly. Heck of a job market right now.

    112. Look like Citi going underwater very fast:''Executives at Citigroup Inc., faced with a plunging stock price, began weighing the possibility of auctioning off pieces of the financial giant or even selling the company outright, according to people familiar with the matter.

      The internal discussions are at a preliminary stage and don't signal that Citigroup's board and management are backing down from their insistence that the New York company has ample capital, funding and strategic direction, these people said. But with the stock down another 26% Thursday, its worst one-day percentage decline ever, Citigroup officials have decided they need to reckon with a range of scenarios that ...''....full story at Wall Street Journal today.

    113. If you don't have a subscription to the Wall Street Journal, I included a link about five posts up.


    115. Should Citi go BK or be bought out by a bigger fish will these changes still go into effect?

    116. Anon, IF Citibank went out of biz (through merger), these changes could get undone. Or not.

      However, because acquiring companies don't move that fast, these changes would go into effect. Down the road, the acquiring bank could decide to bring rates back down. But who knows. This is all speculation.

    117. I have been a CITI customer for close to 21 years. I do not carry balances on the card, but do use it frequently for everything and pay it full before its due date. Last I checked my FICO was in the low 800's. I want to share this dream I had a while back that left me a little uneasy - I was attempting to buy something with my CITI MC card but the card was declined. I remember feeling upset and embarrased as it did not make sense why would they decline the card but it wasn't declined because of anything having to do with me nor my credit; it was declined because the company no longer existed!!! How weird is that? Anyway I thought I share!

    118. Anon, looking at the company's share price today, maybe your dream isn't that far fetched.

    119. LOL @ the dream...I had a deja vu yesterday too. A few nights ago I dreamt that I was thinking about closing that account and spreadin what I owed into two other cards. While I was washing my dishes I remembered that exact same thing. Funny thing was that I never knew they had announced they were going to raise rates.

    120. Got my letter today. Citibank customer for 20+ years. Credit score near 800. High net worth. Plenty of cards at low rates. Zero balance on my Citi cards with $60K+ in credit. They want to take me to Prime+ 13.99%. Crazy. Won't impact me at all because I'll never use ANY of their services EVER again. This will be a PR disaster for the company. Unfortunately, these losers will probably get a handout from taxpayers, but I wish we would just let them go broke. BTW...called them this evening and they told me that all cardholders were getting their rates raised. Wondering if that's really true.

    121. Anon, thanks for the note.

      A customer service rep told you that everyone was getting a rate increase? I haven't received any notice yet. I'll let you know if I do.

      Also, this was supposed to impact less than 20% of Citi's customers. I'd argue that the CSR is misinformed. Or, the public is being played.

      Make your pick.

      I wrote a story earlier this morning. I'm thinking that more than 20% of customers are getting an increase. But all? No. I won't go that far.

      Here is a link to my story:

    122. Thanks for the feedback. It's almost worse if it's 20% of customers. Believe me, I feel for everyone with high balances (been there). But here I am, always getting letters from Citi wanting to know how they can get me to use my cards more - and then they pull something like this. Based on some of the comments on this blog, it seems like they have a funny way of profiling customers if they're truly targeting the lowest 20%. Thanks for providing a place for me to rant. I feel better now. ;)

    123. Anon, rant anytime you'd like. Very welcoming blog here. And my readers are awesome. Very friendly.

      Citibank should just admit that they screwed up. Times are tough. We need to raise interest rates on our customers. Nordstrom did that. You don't see a huge backlash.

    124. My turn... Letter came today. Rate was fixed 8.99% for the past 8 years. Today the letter states is going to minimum of 14.99%, basically doubling my interest rate in one swoop! My credit score has improved by 100 points during my time with Citi. I was appalled and already called to opt out even before searching about this online. I have always recommended Citi as a stand up credit company. It is incredulous that they are alienating their customer base to pay some bills. I have opted out, therefore I will not contribute by paying the higher rates... and, Citi has lost me as a customer once my current terms expire. Poor strategy. What they are banking on is the ignorance of the customers that will not read their mail, will not opt out, and thus will be stuck with higher payments without realizing they are being played. Making this terrible economic situation worse. Bad Citi!

    125. Just to clarify, 100 points increase puts score above 700, not from 400 to or 500 to 600.

    126. Anon, thanks for checking in. This thread is turning into a roll call of sorts. I'm enjoying it. Nice to see how many customers, with good records, are being affected. It shows me that something is not right. Citibank is affecting some really good customers. Worse, these customers aren't taking it laying down. Lots and lots of customers are opting out.

      Now that I think about it, Citibank probably underestimated how many people would opt out.

    127. I got my statement for my Diamon Preferred Rewards Card. I have a $2,000 and standard rate of 9.99%. Well... attached to the statement was a notice that my APR will be 16.99%.

      Been a customer with Citibank for 15 years, no missed payments, excellent credit history, have three accounts, a student loan and this is the thank you I get?

      I am being punished for Citibank's misfortunes? I planned on using the credit card for holiday shopping, but I guess I have to re-think that. I guess I will have to pay off the account with get my tax refund in February and cuts my ties with Citibank.

      I have been a Bank of America customer for 15 years and I get credit limits and low interest rates on my credit cards.

      Also, why would a new customer get an APR as low as 7.49% (according to your website), and I get an APR double that? That is customer loyalty?

      Plus.. I have the Citibank AA card.. 13.99%. Usually that would be a high rate card, but I guess not now!

      Go bankrupt!

    128. CM, the CSR I spoke to during my opt out stated "across the board" to me as well...

    129. Anon, it's nothing personal at this point. Citi is hammering a lot of your peers as well. As you can see from this thread, a lot of customers are excellent customers. And have always been excellent customers. All Citibank is doing here is driving customers away and begging customers to not carry balances.

      In the end, those customers who weather this storm will be better off for it. If it encourages customers to not carry balances, then good. I'm just hoping that these rate increases don't kill customers.

      Moreover, I am worried that some customers won't get the memo about opting out. You know a lot of customers never even read those change of terms. Those are the people who I worry about most.

    130. To the other Anon, thanks for the comment about "across the board." Looks like the CSRs are being trained to say that. I wonder if Citigroup got the memo, though, that someone is whispering to the Wall Street Journal that the rate hike affects less than 20%.

    131. Got my letter today. I might be a bit different from some other people here. I've got a Citi Simplicity card I've had for about 4 years now. It has an 8.99% Purchase APR, and the letter told me this was being increased to 14.99% APR. The trick is that I have a lot of debt on this card...... currently $20,800 with a credit limit of $27,500. The card expires April 2009.

      It's my only real debt at this point (the other being about $2800 I have left on my auto loan for a 2003 Toyota Corolla).

      My feeling is that I really need to opt out and have them close the account; I don't think there's any way I'm going to pay the whole debt off by April, and it seems like I'd be taking a major hit once the interest rate boots up to 14.99%.

      What sort of impact do you think this will have on my FICO score? Either way, I'm definitely going to need to plan out a way to get all of this paid off as soon as I can.

    132. Oh yeah, just to follow up on my post above, when I did ask them why my rates were increasing, they also told me it had nothing to do with my personal account, and was an across the board change in terms that was affecting everyone (I asked them if there was anything I could do to maintain an 8.99% APR, and they basically said times were tough and they had to increase the rates). They definitely tried to give me the idea this was something happening to everyone, not just me.

    133. The "opt out" portion says: "If you opt out of these changes, you may use your account under the current terms until the end of your current membership year, or the expiration date on your card, whichever is later. We will close your account at that time. You must then repay the balance under the current times."

      I guess you're right, it sounds then like that would be until the end of 2009, which would give me I guess 13 months to pay off $20k in debt. I think it might mean making some changes (right now I put $416/month into my Roth IRA, and another $500 into a mutual fund with Ameriprise, who I use as a financial advisor). I definitely need to find a way to start paying more than just the $350 or so in minimum payments though.

      Assuming it's the end of 2009 though, would you then agree it's probably the right move to opt out now and pay off as much as I can (so even if I don't pay off all $20k by the end of 2009, at least then it might not be such a hit on my FICO score when I do get to that point).

      Separately, I have strongly been hoping to finally purchase a home (under $250k) in 2009.

    134. Anon, I am in my third year of law school. I've been trained to read stuff like that. But guess what? I don't like the language. It's ambiguous. I'd call Citibank and find out what they mean by that disclosure. At first blush, I read it to mean that your card will be canceled at the end of 2009. But the word "current" creates a problem with that translation.

      I'd call. You really can't devise a plan until you have a definitive answer on that.

    135. If it were me, I would really pencil this out. My first inclination is to just opt out and pay down balances as aggressively as possible. I would not want my rate to increase with a hefty balance on the card.

      But that's me. You have to do what's right for your situation.

    136. Anon@10:23pm, thanks for the comment. Again, another customer who is hearing that this is across the board. Keep these comments coming. I was able to write a story today because of the comments in this thread. Something doesn't smell right. We're being told that less than 20% of Citi's customers are affected and yet what I am seeing in this thread seems to undermine that assertion tremendously.

    137. I got my letter today. I have a credit score in the 750s. I have never been late. My APR was increased from 7.9% to Prime plus 18.99%, with "a minimum APR of 24.99%."

      The balance on the card is $120. I'm paying that today and will never, ever use their services again.

      I can't believe we are paying with our tax dollars to bail out this industry and they turn around and raise rates like that. Their greed makes me so angry.

    138. True.... "current membership year" to me sounds like 2008. When I did call them up and ask them to clarify, they did agree that it would be the expiration date (although when I asked, I didn't notice the bit about "current membership year", so didn't think to ask). I'll call again, but I'm going to assume either way it means it will close April 2009. Either way, I think I have to opt out and just pay it off aggressively, as you mentioned. I know there will be a hit on my FICO score, but frankly I've been carrying it at near the max anyway, so it probably hasn't been very good anyway.

    139. Anon@10:34pm, thank you for the post.

      That rate they are assessing is punitive as far as I'm concerned. That's the kind of rate you give to someone you don't like.

      Even if I do get a rate hike notification, I will be leaving the account open. Like you, I carry no balances on my Citi card. The APR increase would have no affect on me.

    140. Anon@10:35pm, I agree. Carrying a large balance -- nearly maxed out as you said -- is not good. Maybe this is a blessing in disguise for you. Get that balance paid down, pal.

      I am a bit preachy on my site about not carrying balances. I used to be guilty of that. I know what it's like to be at the mercy of card companies. I eventually got out from under that practice. It's been a very good thing since.

      Good luck, Anon.

    141. That's the thing I don't really get..... I'm not totally sure what Citibank gets out of raising my rates. The main thing I guess is that it is spurring me to pay off my debt as soon as I can and get out of there, and I guess they'd rather have my $20,000 soon rather than having me hypothetically keep making minimum payments for years. But am I wrong in thinking they'd rather have me as a customer for years and years slowly chipping away at $20k with an 8.99% APR rather than just paying everything off and closing my account out as soon as possible?

    142. Anon, from a profit standpoint, it makes sense to just let you pay forever. You've shown that you won't be late on the payment and that you're good for it.

      On the other hand, this economy is in the crapper. I'm thinking Citi wants the liquidity more than anything else. They'll forgo some profit later for liquidity today. In other words, they want to get paid.

    143. Oh yeah, I agree. I've known for a long time that I should pay my balances down, but I've been pretty irresponsible I guess. When I first got this account it had a $10k limit....... and every few months Citi would send me a notice saying "Congratulations, we're increasing your limit to $12,500.... then $15,000, then $20k... then most recently to $27,500), and I kept just spending more, not really thinking.

      I've never felt really good about it, but I've gotten in this habit of thinking it's not so bad, but it clearly is.

      This is the only credit card I have with a balance right now (I also have an American Express Blue without a balance, but only like a $2500 credit limit)..... I am pretty sure once I do get out from under this, I won't fall into the trap I let myself fall into with this one.

    144. Anon, I was in the same place you are. I used to have utilization of 65% -- across all of my cards. Bad. I was a bad boy. But I could handle the payments so I thought it was ok. My FICO scores were in the mid 600s as a result of that high utilization, too.

      Then I sold my house and paid all of my credit card debt off. It was perfect timing, too. I was heading to law school and I would have had trouble if I kept making minimum payments on my card.

      It was a life-changing decision for me to pay off those balances. It did suck, though sending so much money to the card companies at once. But I haven't looked back.

      Best to you.

    145. Hi again CM. I stumbled in here from a google search and posted Anon a couple times in the past 2 days--first with shock and awe at getting jacked to more than double my current rate on my two Citi cards, then again after deciding to just bite the bullet and call and opt-out. I am compelled to keep checking this site from a misery loves company standpoint to the point of obsession, but wanted to reiterate two very important comments you have made:

      Reading your comment about following up my opt-out call with a letter is excellent advice and something I would not have thought to do. My trust for Citi is zero after these shenanigans, so I'm grateful for your advice. If I seemed to vent a bit much in my previous posts here, that letter is a smoldering ember as it wings its way to Sioux Falls, let me tell you!!

      Secondly, your astute comment that Citi is probably counting on the fact that a good majority of its customers don't even read those little inserts that come with their monthly statements got me thinking, so I called my parents and then my in-laws. 2 out of 5 accounts among the 4 of them also got hit with huge increases, and luckily all but one "noticed the notice". The sneakiest of all was my mom's Diamond Preferred MC statement. I took a look at it tonight -- it comes each month on 4 letter-size sheets of paper, folded in thirds (not as most statements I've seen with the actual statement and then all the inserted blah blah materials on small, separate pieces of paper.) Her opt-out notice was pre-printed on the BACK of the 2nd of 4 pages. Obviously not something lots of people would bother flipping through, since all the recent charges, payments and other relevant info is on page 1.

      I envy my folks...they only use that particular card for the rewards, so trust me, when mom and dad read this blog earlier tonight and saw how hidden the opt-out was on my mom's statement, their account was paid in full by e-pay within 10 minutes! They too worry for those who are on the edge already and then won't see the notice and get hit with a big whammy come their next statement(s).

      I feel like I'm on a crusade now...have sent emails out to some friends with a link to read your blog and encouraging them to pay attention to this month's Citi statements.

      I'm not a gambling man, but I'd be willing to wager that I will hear back from more than 20% of them and they'll be fighting mad.

      You should be very proud of what you spend your time doing CM!

      Anon as usual but a/k/a Chris

    146. Chris, I really appreciate your comments. Seriously. It makes what I do around here worthwhile indeed.

      That disclosure on page two of your mom's statement is ridiculous. Citibank should be ashamed of itself for burying an important disclosure like that on page two of what reads like a legal document. Most people wouldn't even read that stuff. Citibank knows it, too.

      I just came back from the mailbox. Nothing from Citibank. So far, I remain unaffected. Because of some of the comments I've seen in this thread, I'm wondering if I'll escape the increase.

      I'm glad you read my story about handling the opt-out process. It's not enough to call. A follow-up letter is necessary. A phone call won't protect you if Citibank later says that it didn't receive a call. That said, I'd be calling Citibank and asking them for a letter confirming your opt out request. How's that for not trusting anyone?

      Thanks for visiting the site over the last few days. Your comment, I am sure, will be of use to my other readers. That buried disclosure on page two of mom's letter will put my readers on notice. Citi is playing "where's Waldo" with the disclosure when it pulls that crap.

      Anyhow, pal, be well. Thanks for the comment.

    147. "Anon, rant anytime you'd like. Very welcoming blog here. And my readers are awesome. Very friendly."

      Don't think to much into this, but "friendly rant" is an oxymoron. LOL!

      Okay, after gleaning through the comments, Citibank says "it's not personal" when the changes are "across the board."

      I don't have Citi, yet I'm a little upset about the way they're going about this. Punishing the responsible users along with the abusers.

      I commented how Nordstrom was doing almost the same sort of thing (before the updates) and I likened it to grade school, where one bad apple affected the whole class. Well, in Citibank's case, the bad apple turns out to be the teacher, and now the whole class gets punished, both good students and bad students!

      To me, this is below subprime.

      Now I fear, if Citibank gets away with this, other banks may soon follow. Which is sad, because I, along with a few others, have always abided by the rules of agreements, and we will have nothing to show for it.

      Friendly rant over.

    148. Virgil, we still have our credit cards, though. That's what we have to show for it. For those who pay their balances in full each month, they're still receiving interest-free loans for more than a month and a half.

      I agree that these rate hikes suck. I wouldn't argue otherwise. But until the card companies take our plastic away, or start charging us interest from the day we make our purchase, we're still not doing too bad.

      The Citibank situation, though, reeks of mismanagement. This was handled poorly. What's more, Citibank seems to have gone out of its way to upset some of its very best customers.

      Citibank may never regain some of those customers.

    149. Anon @
      said it best.

      Citibank is killing the Golden Goose.

    150. Damn, you're still awake in this ungodly hour?

      I'm 2 hours ahead of you. Which means you're at 3 a.m.?

    151. Yep. Citibank is killing the golden goose. Some customers were willing to keep their balances and pay over time. Citibank could have made a lot of money off these customers.

      All that Citi has done, though, is give these customers resolve to pay these balances down as quickly as possible. My guess is that some of these customers will never carry balances again.

      We can at least thank Citi for that.

    152. Virgil, I am on the west coast with you. Pacific time zone.

    153. CM, I thought you were in Central Time Zone! I was referring to your former moniker at CB, when you had "tx" meaning Texas. Am I mistaken?

    154. Several years ago, V. No mas. Now back closer to home.

    155. And here I thought that I was keeping you awake by posting as late as 3 a.m., which would have been 5 a.m. if you were still at TX.

      My job is tough, but I've been going by with 3 hours sleep for as long as I can remember, and still managed not to get in trouble by customers nor management.


    156. I must say that I have ways to make up the sleep.

      I'm not a medical miracle by any means.


    157. Got my notice today, I have a ~5800 balance on my citi platinum card and the interest rate was raised from 12.99 to 24.99. Suck, I have paid off over 27k in debt this year and raised my score to over 700. Guess I will opt out as there is no way I can handle 24.99%, I will default before I pay that! Not a smart move on Citis part, if you miss payments, pay late, pay just the minimum, sure I could see it, but NEVER being late on any bill in the last 15 years...good call geniuses. I know a lot of people living on their creditcards, I've not charged in over a year, if they think the mortgage failures were big, wait till everyone just stops paying on their credit cards altogether. Risk assessment my you know what.

    158. Anon, yes, definitely opt out. That 24.99% would kill you. Your payment would nearly double.

      On the front, I did not receive any mail from Citi today. So far, I remain free of this rate hike. Given what I've heard, in this thread, about CSRs saying that this is across the board, I should be getting a notice. If I don't then we know that Citibank is just telling its CSRs to say that so customers won't feel bad.

      We'll see.

      Hang in there, Anon. Keep chipping away at that balance. And congrats for reducing your debt so substantially this year.

    159. Thanks for the link to the NYT article. Interesting read. "...And since joining Citigroup in 1999 as a trusted adviser to the bank’s senior executives, Mr. Rubin, who is an economic adviser on the transition team of President-elect Barack Obama, has sat atop a bank that has been roiled by one financial miscue after another." That's not too comforting in hoping the new administration does indeed intend do things differently!

    160. CM,

      I have a family member who received the same (sample #2) notice shown in your post. APR increase to LIBOR plus 11.99, minimum 14.99.

      She has a 750+ FICO score, no late history and low utilization.

      While it says the changes will be effective on billing periods starting on 12/3, it also states that as of 9/17 "this purchase rate APR is 14.99".

      They're just using that as an example and not talking retro, right?

    161. Right. I saw that. They were just using that date as a reference point, Scott. As of that date, that's what the rate would have been.

      I also found it interesting, though, that they used 9/17. Typically card companies use the most current information they have when sending letters out.

      Could it be that this has been in the works for a couple of months?

    162. Got my letter-6.99% to 24.99%. Never late on any payments in my credit history with them or anyone else. Ironically, had just paid half my $11k balance with them off the date of the letter. My credit limit was $12k with them so perhaps it was the high utilization with them though my overall utilization is low.

      Needless to say, I am opting out. I can pay it off it a couple of months (expiration date is 2-09) but its more the principle than the rate. I don't need the card and I don't need Citigroup in my life. Just another irresponsible choice for them. Thanks for the great blog.

    163. Anon, thanks for the note.

      So you now have a balance of roughly $5,500. I think you're right, though. They probably got you because you were maxed out on the card.

      Even if you opt out, your card won't be closed until the expiration date on your card. You'll continue to enjoy your 6.99% interest rate -- even after the closure.

      And you are welcome for the blog. As long as you guys/gals keep reading, I'll keep writing.

    164. I have 4 Citi cards and 1 ATT card which is also owned by Citi. I got my first letter today. So if everyone with a Citi card is going to get an increase does that mean I should ecpect 4 more letters to come? And if I opt out of everyone of those accounts, how bad will it destroy my FICO score? I'm not really concerned with my score. We just bought our second house and we don't really plan to buy anything major in the next 5 years that we would need a loan for. But I'm also not going to pay over 15% interest on a credit card when I have been paying under 9% for the past 10 years. I'd rather ruin my FICO score than do that. Drastic I know but I'm tired of paying for others.

    165. Rthomp, there is no way to know what will happen to your credit score. As I have written before, closed cards impact utilization. Closed cards to not impact the age of your accounts. Even closed cards continue to age for scoring purposes.

      Therefore, you would need to figure out how much available credit you would lose if all of your Citibank cards were eventually closed.

      Also, for every card that gets an interest rate increase, you'll receive a letter. One letter does not fit all.

      What's more, not everyone is getting an interest rate hike. There is a chance some of your cards won't be affected -- while some of them could be.

      Rthomp, you should read my story about closing cards -- and what impact it has on your FICO score. Here you go:

    166. I will read your story. But can anyone answer me this: If Citi is getting all that bail out money then why do they need to increase credit card interest rates? Thank God my mortgage rate, which is held by CitiMortgage is locked and can't be raised. Can it? Lord I hope not!

    167. Anon, if you have a fixed mortgage rate, it CANNOT be touched.

      As for the credit-card rate increases, those were already in the works before the bailout was announced.

      Do they need to increase rates? Probably not. But when did that ever stop a card company?

    168. Based on comments here and your own personal experience, will this rate increase do any damage to Citi? With this increase to affect 20% of these card customers, how many customers do you feel will opt out? If the majority of the card customers opt out, how does will that help Citi? How will it hurt Citi?
      Thanks, Rthomp11

    169. If every single customer opted out, I don't think that would help Citi.

      I'm convinced, by the way, that most people ignore correspondence from their credit card companies. I suspect a lot of people will get the increase without even realizing it -- because they ignored the notice in the mail.

      I have no idea how many will opt out, though.

    170. :-) Very true but I think more people are watching the news these days and as a result of that are looking more closely to everything else, including mail. Unless they are just stupid.

      Personally I think the bail out is enough, they don't need to increase the interest rates too. There are a lot of fat cats out there that need to take a huge pay cut. If they are that desperate for money from the government then they should be willing to take a pay cut too.

      If the card increases were in the works before the bailout money then why do they need the bailout money? Or now that they have the bailout money why proceed with the interest increase?

      If someone decided to keep their card and accept the increased interest, once the economy gets back to normal, (I know wishful thinking) how likely is it that the rates will go down? I mean gas prices went down but everything else that increased because of the high gas prices haven't come down. Why not?

    171. Got my lovely letter this afternoon. I have been a customer for 8 years, never late, always pay nearly double the min. payment, but I do have a large balance. I owe 17K on a 25K credit limit. I had a baby in May this year and had many complications that lead to numerous charges. I also charged a roof repair a few years back. I had a rate of 6% and now they say it is going up to 14.99% at the minimum. I opted out this afternoon. I am pissed to say the least. I now can't use this card for emergencies, etc. What a great way to treat good customers. I had to do this with my BOA card about 1 year ago too. I paid that off quickly and didn't opt out. Figure I would hold a card with 10K available...that I think hurts them more if you don't use it..means they have to have capitol ready and waiting for you...jerks..I can't even express how mad I am. I have one other card with the best bank in the world..USAA...hope they don't ever do this.

    172. Anon, sorry to hear about the rate increase. Given your balance, it was a no brainer for you to opt out. Get that balance as soon as it is practicable. That balance, even at at lower rate, is chewing you up in terms of interest fees.

      As for USAA, I am with you. I have a card with them as well. So far, so good. USAA has weathered this storm pretty well as far as I can tell.

    173. I actually just got this letter in the mail today as well. I found it interesting and decided to do some research here, and found this site. Very nice site by the way.

      My credit is not that great, I'm pretty much fresh out of college with a lot of credit card debt. (Thank you expensive school!) My credit score hovers in the mid 600s. My rate will be increasing to 14.99%. I was debating opting out, simply because my current rate is 9.99%. I was uncertain though, I carry about a 9,000 dollar balance on this card, unfortunately. You know what's funny about this whole thing? My rate actually dropped a few months ago. It went down from 10.99% to 9.99%.

      Also, even if it is "only 20%" of Citi's customers, when you're talking 20% of over 50 million cards, that's a hell of a lot of people.

    174. Hi CM, Chris again...

      like the train wreck this situation is, I just can't look away. I am so p/o'd with the rate raises I received after being a good customer and then to read of the bailout overnight.

      I feel I am subsidizing myself at this point?

      I don't even know who to vent to at this point. Shouldn't all of us Citi people be able to marshall one voice and just vent, even if it changes nothing??!!

    175. It would be right around 11 million customers affected, Makalio. There are currently 54 million customers at Citi. That's a lot of people. So far there are only 181 comments in this thread. I need to get in touch with about another 10 million Citi customers. Wink, wink.

      The rate decrease you're referring to, Makalio, is related to the prime rate falling. As prime fell, our variable-rate cards fell with it. That's why we've all been seeing our rates fall.

      Glad you're enjoying the site, by the way. Feel free to browse. My site is very credit-card centric. Also very FICO oriented. Poke around. Take a look.

      Good luck chipping away at that balance. You can do it. Just set some goals and dig in.

    176. Chris, feel free to vent. And feel free to come over here and chat anytime. I'm around the site quite a bit. I get email notifications whenever someone posts a comment at I typically respond to comments within five minutes (unless I am at the movies or shopping or in class).

      People can just continue to opt out. That's about the only thing I can think of. Also, paying off these balances at the lower rates will send a message home as well. Higher rates, with good customers, are unacceptable.

      Chris, you're very welcome here. Feel free to post any time.

    177. Do you think I should opt out? I mean, I'm currently paying about $70 per month in interest, and with everything else going on, I'm not sure I'd be able to afford it.

      I'm also leasing a car I can't afford. My ex and I got it, and now I'm stuck with the payments. So I'm not sure I could take the extra on top of it...

    178. Makalio, if you think there is a "chance" that you can't afford this increase, I'd opt out. You're better off opting out and keeping your current payment. Down the road, I am sure you'll have to replace this lost available credit.

      But for now, take care of you and your situation.

      Do what's best for you now. I can't tell you what that is, however. Only you know what that is.

    179. I rec'd my letter today. I have two citi accounts and this was on my Diamond Preferred Rewards Amex. Raise from 10.99 to 17.99.

      I keep a low balance of $1000 on statements but PIF within grace period. Not really affected as I will pay off and suspend using except for online purchases but the principal of it is offensive. I've had this card since 2007 but my other Citi (not yet affected) since 92, plus two mortgages, checking and savings with them. I have 750+ score so perplexed at the rational behind such an increase.

    180. RE, thanks, pal. I don't understand what criteria Citi is using to assign these new rates to customers. I need to go check the mail. Everyone seems to be getting notices in the mail today.

      I don't see why I should be so special to avoid this rate hike. If I do get a rate hike, I will immediately write a story detailing my own risk profile.

    181. I think everyone is affected "equally". They are trying to recoup losses from bad lending practices and we are left holding the empty bag. It would certainly seem that there should be conditions on the current bailout to alleviate the interest rate increases. I have contacted my legislative representatives as well as the banking committee. I am only one voice but some how I think others are responding as well (even if they don't hit this blog). This is just NUTS. 25 billion MORE in bailout and interest rate increases for those that are paying customers. I am so angry about how we are caught in the middle of this mess and essentially have no voice. This is not encouraging for responsible people. You gotta love this system.

      By the way, I think the low FICO score folks will NOT be on this blog. My guess is Citi and other lenders have forced them to default by higher rates and they have simply given up. I would think that they don't believe they have any good argument against the rate increase. I think that is ridiculous, but most of those folks feel "unworthy" based on credit scores.


    182. Found the blog via Google (great site by the way).

      I have a 720+ FICO. I received my letter today. Rate nearly doubled on my Platinum Select from 7.99 to 14.99. I've had the card since 1997. Never missed a single payment on this or anything else. I keep the card around 25-30% utilization. I could pay it off in full, but I'm thinking of holding on to my extra money because of the current economic market. Luckily my card doesn't expire until 2011, so I'll probably opt out. At least that gives me a few years to get another account or two, or renegotiate with Citi assuming things change.

      I echo the sentiments of everyone else here. It smacks as a ridiculous business decision to penalize your good customers because of the company's bad decisions. Because I keep a balance, they make easy money on me... but because I'm not highly leveraged and have never missed a payment... I'm virtually no credit risk. Yet after they take our tax dollars for a bailout... they reward my years of patronage by doubling my interest rate. What a joke.

      I called tonight and spoke with a CSR and her supervisor, both of whom told me the increase was across the board. I tried to be nice telling them I know they must be having a bad day because of all the news and calls... and the supervisor cuts me off telling me she is having a great day. What nerve... I could never have a great day telling everyone that my company was screwing all of its customers. Needless to say I'm done with Citi after this card is gone.

    183. This is what I sent to the banking committee. Perhaps you may see more traffic.

      Please go to Citi is raising our rates while receiving our tax dollars. Please negotiate a business plan that will provide relief for credit card holders.

      Thank you for your consideration in this matter.

    184. CM, You've obviously touched a nerve here. I'd be interested in knowing how many "Citi Refugees" you've either encountered or retained as new readers.

      In any case, I hope the WSJ, NYT or some other financial-type blog/MSM picks up on the analysis and/or comments from Credit Matters.

    185. Scott, I have picked up quite a few new readers. And they're certainly welcome here. Glad to have them. I have friends at the WSJ, NYT, etc. They are aware of my site. Occasionally, you'll see the Wallet, a WSJ blog, pick up one of my items from here.

      By the way, I have a story coming out in the morning you won't want to miss.

    186. I have now received a rate hike. You can read all about it here:

    187. I received my notice last week as well, and at first I couldn't remember what my current rate even was (I'm not nearly as polished or knowledgable about these things, and don't have a clue what my FICO is, to be honest!)

      After doing a search on their site and discovering that mine was going from 7.49 to 14.99 I was really upset, as many are on here! (And especially after the big announcement of their bailout, and knowing Citi wasn't about to send out letters of "hey, we changed out minds! Your APRs will stay the same!" it really made me mad.)

      That's when I searched out this site, and found some great information. Thanks! I owe $28,900. (OUCH, I know...) on my Citi Simplicity card. (In fact, I recently moved a balance from another Citi card I had, to this card; combined the two, and closed the other card. I had no idea closing cards could kill FICO scores.) And while I guess people maintaining balances should be the ones to get APR increases (sigh) doubling them is simply not right. "Hey, we want your money quicker! Pay us back! So in order to do that, we're going to raise your interest, which will make you really take even longer to pay us back, cause you'll owe us more money and won't be able to pay your bills!" makes sense to me?

      There is simply no way I'm going to be able to repay that amount before my card expiration, which is 9/09. Yes, a lot of the total is my fault, as well as being out of a job for over a year, car repairs, etc. Many of the people I hear yelling at others for having large credit card debt, and not simply paying it off, might not know other people's circumstances that led them there. Nothing is black and white. (Though the yelling has been going on in other blogs I've been reading. This blog is so informative, kind, and caring of one another! Kudos to everyone on here!) I currently barely scrape by each month, a balance due increase on this card would kill me.

      All I can do is opt out, and pay off, and I guess get a huge cut in my FICO. Does anyone else think that credit scores, and such are done in such blissful ignorant manners? I mean, it's another case of black and white. Instead of "well my credit card company doubled my APR, which is ridiculous, so I had no other option but to opt out, and pay off the card" turns into Negative Check Mark for ten years (and what is WITH the ten years?! That's crazy.)

      How did people get loans, etc. before there were credit cards? Huh? I think the entire economic system needs a major overhaul in this country, and how things are done. Three numbers sure do control a lot of how someone can live their life, you know? (I mean, you need good credit, that's not what I'm saying. But also there needs to be some more knowledge of why someone's credit is what it is, and how it got there. And not just check negative + check plus + score = no/yes.)

      Anyway, way off topic. I just thought I'd chime in with my situation, as others have. I've always thought rather well of Citi, and I realize their issues right now, but as others have said, doubling someone's rates is just insane, and not good for long term business. Perhaps they feel that new suckers are born everyday, and if they lose us, they'll gain others...?

      One thing is for sure, by cancelling my card, I won't be able to use it anymore, and will get that much closer to paying it off! Thanks, Citi! You've (sorta) helped me out!

      PS - I've read that if you opt out, Citi says you can still use your card at it's current rate til the expiration date, then it is cancelled. But I'm reading on other blogs that actually, if you do use your card after opting out, the card automatically goes to the new APR rate and the opt out is cancelled. Any truth to this?

    188. Oh my, so sorry that's so long! LOL

    189. I've had a Citi card since 1991, when I was a college freshman. I've never had a late payment, not one in 17 years. At times (just after college) I carried a high (25K) balance, so they've made their money in interest from me, to be sure. I didnt have much then, but I ALWAYS paid on time.

      These days I use my card often, but for years I've had no revolving balance. Credit limit is $27,500. Old APR was 9.49% and with the letter I got yesterday it's going to 16.99%.

      While the change won't affect me since I carry no balance, I think it's absolutely disgusting that they are throwing the same people whose tax money bailed them out right under the bus.

      I'll be closing my account and boycotting Citi, and suggesting that my friends do the same.

    190. Anon, that's the crappy part. Although it won't affect me either, it could potentially harm those who do not opt out.

      The only good thing in all of this is that Citibank is allowing for customers to opt out. Some banks provide no opt-out clause. American Express's recent rate hike does not provide for opting out. Ditto Nordstrom, which imposed a rate increase on all of its 2 million customers.

      I'm with you on the taxpayer angle, though. Pretty interesting to say the least. Take our money with one hand and smack us over the head with the other.

      Thank you, Citi, may we have another?

    191. Oh yeah - didn't mention above - my Citi card is a Rewards type card, where I get cash back.

      That's why the interest rate was fairly high to begin with despite my financial situation (which is quite good, and I have no revolving balances on any card.)

      Not sure of my FICO score - I should check that - but it's got to be pretty darn good.

    192. Nathan, thanks for the post.

      Let me address one of your questions from the get go. There is no truth to what people are saying about using your card after you opt out. The opt-out notice says that you "may use your account under the current terms" until your card expires. That means you can make purchases as well. Those other blog sites are just wrong. I'm not surprised. There is a lot of misinformation out there.

      Nathan, it sounds as though you don't have any choice but to opt out. The good thing is that your rate will remain in place until you pay that balance off. Good luck on getting that balance done. I'm not as simple to think that one size fits all when it comes to accumulating large amounts of debt on credit cards. No need to dwell in the past, either. Looking ahead, just get that balance down, friend.

      And speaking of friends, you mentioned the friendliness of my site. That's right. I don't tolerate mean-spirited posts here. We keep it clean by debating issues here. You attack issues -- not people. People who attack others typically have nothing worthwhile to say. That's why they don't go after issues. Anyhow, it's not an accident that my site does it right. I have a professional crowd here. I've never had to delete a single post because of people attacking each other. That's pretty awesome.

      Last thing: you mentioned the opt-out process as negative. It's not. It doesn't hurt your score if the account is closed. As long as the account was positive (no lates, etc.), the account gets reported as a positive on your account. It's 10 years more of positive history.

      Now, one thing that I would worry about is how Citibank is going to report the accounts once they are closed. Many card companies report the credit limit as $0 once the account is closed. But if you are carrying balances, it will look as though you are maxed out. That's because closed accounts still take utilization into effect. So this is going to be interesting for those who opt out and carry balances even after the card expires. I imagine that we'll start hearing about customers who are suffering from FICO problems if Citi reports the limit at $0 after these cards expire.

      Stay tuned.

    193. Anon, thanks for the follow up. Rewards cards do have higher rates, so I understand.

      If you do happen to pull your FICO scores, be sure to use the discount code of CPPSAVINGS. You'll get a 20% discount. Don't pay full price.