Citibank and Other Credit Card Companies Raising Interest Rates

On 11/28/08 I received a letter from Citibank telling me that my interest rate was going to increase on two separate credit cards that I have with them.

My regular Citibank credit card interest rate was at 11.990% and it is being increased to 18.99%. I only have a balance of a little over $1,000 on that card.

I have another card issued by Citibank with the ATT Universal card name on it. That card had an interest rate of 17.260% and it is being increased to 19.99%.
I am carrying a $5,000 balance on this card.

I am going either going to OPT on on both cards and stop using them altogether or I am going to transfer the balances to a low interest rate of 3.99% for one year that my Bank of America card keeps offering me. me.

Looks like I'm joining a large club here. I got a letter today notifying me of an increase from 7.9% to 14.99% minimum (or US Prime Rate + 8.99%, but minimum of 14.99%). Based on what everyone else here seems to have experienced, I'll save myself the phone calls, and just write them a letter opting out. My card expires in 3/09 so I'll try to renegotiate in February or so and see what happens.

The only thing I'm concerned about, is that with this card, once you opt out and the card expires, they close your account. Closed credit cards can affect your credit score. I had a similar situation with BofA about a year ago, and I just opted out, but they didn't close the account. Anyone have any ideas?

Looks like we're moving to an all-cash society...

I've used credit cards to finance my business for the past 6 years since I was never able to get a small business loan, even with a 720 credit score and 100% collaterization (I do heavy industrial and electrical work). Business is good, but I've had three different card companies raise my rate from approx. 9.9% to 36% - even while being paid ahead. With all the excess money in the market, this bailout and the accompanying grab for money is the biggest fraud or scam I've ever seen perpurtrated. I refuse to help these bas***ds and I refuse to quickly pay off the credit since the credit is disappearing at an exaggerated pace anyway. I watch the media "experts" suggest you would be most responsible by paying off your credit cards immediately - Why? What is this connection between the media and the banks.?, Oh never mind. Anyway, it was revealed to me by Advanta that if I didn't respond to the bank's mailing to increase the rates to 35% within 10 days of the notice that I would have waived any right to complain as per the company's policy - regardless that I didn't get a notice. Advanta, Citigroup, nor American Express could give relief though any representatives because it was propone that "their" internal policies do not allow for discussion or negotiation. Whats a person (or number) to do? Well this person sent a notice that says I will pay according to terms I took the credit under and that I will only pay the minimum monthly installment as I determined according to those terms until such debt is paid and don't bother calling me as I would be happy to see your butts in the most useless and pathetic court system ever devised(my internal policy allows response and considerations to claims from the banks, but they tend to just try to straight arm me without negotiation). Also, I warned these companies that if they intend on writing off the debts that I will continue to make the payment on that debt to the same bank regardless of whom the debt was sold(the bank, especially American Express, will always take a payment). This approach makes my debt management simple since I don't have to chase my debt around or worry about terms, and because it does illuminates the fraud occuring in these banks if anyone bothers with those kind of technicalities. It doesn't make everything okay though: Remember I am running a business which has become properous based on the tools that I had available when I made my decisions and I will not sacrifice that business because I am naive to believe that the bank has the authority to compromise my business as easily as it will sacrifice my government.

The CC companies are proactively re-setting in advance of the anticipated run-up in balances that would preceed foreclosures on individual debt. If you think 2009 is going to be bad, it will pale in comparison to 2010 and 2011 when ALT-A loans re-set.
Yes, the CC companies are "Penilizing" {aka Paul, thanks!}, and have been ever since you opened the account.

I have been a Citi card customer for 10 years. I've never made a late payment, EVER. I used to carry a high balance until about a year ago. At that time I paid the balance off. I use the card very little and pay the balance off every month. Last week I got the letter from Citi indicating they were raising my interest rate from 10.99 to 17.99 and gave them I call. I asked specifically if ALL cardholders were getting the increase or if a subset of cardholders had been re-evaluated as an elevated risk. I was told that ALL card holders were getting the increase. Though I didn't believe her and this article confirms it I told the lady that even at 10.99% this card was the highest interest rate I have and that I certainly had no use for a card with 18% interest. I told her that if indeed they did reclassify some customers as higher risk that they needed to do some more digging. My income is far different today than it was in college when I opened the account and I have nearly eliminated all of my revolving debt. She had no sympathy or understanding so GOODBYE Citi!

Check out bankrate.com. I just got approved for a Capital One Platinum Prestige Visa with 0% until Oct 2009 then 8.9% thereafter with no annual fee.

A word of advice though, never close your account. By opting out they will close the account once it expires. This will negatively impact your credit score. I'll be putting this card in the home safe until Citi sees fit to return my interest rate to reasonable levels.

It's not just Citi. Chase is doing the same with their credit cards. From the WSJ:

J.P. Morgan Chase...will also start charging a new $10 monthly service fee to some cardholders who have been carrying large balances for at least two years, while raising their monthly minimum payments to 5% of their outstanding balance, from 2%...
Chase's new monthly fees and higher minimum payments will mainly affect customers who have been carrying large balances on cards with low promotional rates for at least two years, says spokeswoman Stephanie Jacobson.

"The total number of customers is relatively low, but the balances that these customers carry amount to billions of unsecured debt," she says. While these customers cannot opt out of the new terms, she says, they can pay off their balances or maintain their current minimum payments in exchange for giving up their promotional rates. A higher rate, however, means that more of a customer's monthly payment goes for interest and less to repay the loan.

Choosing to Decline
In some cases, cardholders may be able to decline the new terms -- although they'll typically have to close their account...

I have a pretty good credit rating of 730+ and Citibank just jacked up my rate to 24.99%. That's crazy !!! Most of the 10 years I have been a customer I paid the balance in full. The last several months have been carrying a balance of approximately $3000 (with a credit limit of 25K). Did a free balance transfer with Bank of America, 0% apr til Oct 2009.

I plan on changing the account to a non annual fee (will no longer get miles - won't matter since I will not use), and stop using it all together. Do not want to close or cancel account because of the effect it has on your credit score.

We've been customers of Citibank for well over 20 years.

Citibank has received thousands of dollars in interest from us over the years.

We paid off all of our credit cards about a year ago... including Citibank.

In November 2008... they chose to raise our interest rate from 15% to 19% even though we've had a credit balance for the past 6 months! Unbelievable!

Interesting thing is... about 8 months ago Citibank offered us a 4% interest rate for any charges made in a 6 month period. After 6 months... the interest rate went back to the normal %.

We took them up on the offer and took a trip... charging most everything on the card. But... we paid off the balance in less than 30 days. Good thing too because we'd now be paying 19% if we hadn't paid it off.

All of the banks are playing these games with their customers and we don't have to put up with it!

Our only recourse is to work our rear ends off... pay off the greedy/loan shark... credit card companies in full and never borrow money from them again.

If you do charge something...pay them off in less than 30 days. That way you can use their money for that time period.

It's really the only way to get them back!

I called Citi Cards today about their raising my interest rate from 11.99% to 18.99%, the customer service rep. told me that "everyone across the board" had their rates raised. That isn't true, since my fiancé' didn't have his rate raised. I have never been late with a payment, EVER and I have NEVER carried a balance. Even when they cut the grace period to 20 days and then take 9 to 12 days to get my statement printed and mailed to me. I usually have about 10 days to get my payment to them. I have been a customer of theirs for over 10 years. I have a Cabela's Visa card with a rate 12.99%. I am going to use that card and just keep the Citi card so they don't wreck my credit score. People can't afford their bills now, and Citi is just adding to the problem. I agree with whoever said the government should raise the interest rate on the bailout loans. Unfortunately they would just raise our rates to cover it. It seems Citi doesn’t care about customer loyalty.

Citi Bank Stikes Again....
Ok so the same thing happened...We opened the mail and there were the dreaded notices one for my account and one for my wifes account. Now mind you, we were nver late and yes, we payed more than the minimum payment. So why would they raise our payment...Simple we are a Dog account they make no money on us..so they screw us and millions like us...8.99% isn't good enought for them...they need more, Greedy Bastards...Everyones answer..is to pay them off fast...Wrong People...You are doing what they want....you are flooding them in cash..That is not the way to teach them a lesson. I called and talked to the account manager and told him if I see the increase interest rate on my statement Citi Bank will not receive one more payment...one either account until they put the interest rate back where it was. They change the rules..I change the rules...
People of United States of Americas...Grow some Balls...