Posted by: distributorcap | February 3, 2009

The Shiti Never Sleeps

Citigroup has had a rough few days – I hope to make it rougher.

Last week it was the private jet, this week it is Kucinich wanting to negate the deal with the Mets to name their new baseball statement – Citifield (for a mere bag of shells at $400 million). Of course there is all the taxpayer bailout money they have taken and the fact that Citigroup has made some of the worst financial decisions in history. And then there is Sandy Weill flying to vacation in another corporate jet and Bob Rubin…… yadda yadda yadda

Now little old me.

I have had my Citibank credit card since 1983 (I checked to see how far back I have held statements – don’t ask). I have one of those “gold” cards that gives me airline mileage – and for that wonderful privilege I get to pay $85 as an “annual fee.” I checked my back statements – the last time I paid a finance charge (by not paying in full) was in 2003 – 5 years ago. I don’t use the card that frequently, and when I do – I pay the balance in full within a few days.

So basically Citibank hasn’t made a ton of money off of me – either from finance charges, cash advance fees or from merchants that I purchase from. Since I am a low margin loser and not the cash cow they dream about, and, with times being as tough as they are – I guess they figured it was time piss me off enough to lose me as a customer.

I received this letter on Saturday.

NOTICE OF CHANGE IN TERMS AND RIGHT TO OPT OUT

We are increasing your variable APR for purchases. Your purchase APR will equal the US Prime Rate plus 8.99% with a minimum APR of 14.99%. As of January 1, 2009, this purchase APR is 14.99%

My current APR is 9.15%. So just because I have been a stable and trouble-free customer (if not the most profitable) and if for some reason I carry a balance going forward – my rate is going up 5.84 percentage points from 9.15%. As a “reward” for my trouble-free behavior, I am getting a 64% raise – in my cost of credit. Times are tough. It gets worse.

Default APR – All your APRs (including promotional APRs) on all your balances may automatically increase to the default APR if you default under any Card Agreement you have with us because you — do not make the minimum payment when due or make a payment to us that is not honored.

The default APR equals the greater of (1) the Prime Rate plus up to {get this} 23.99%, or up to 29.99% We set your default rate……..

30% interest rate. Joe the Loan Shark is probably a better deal. And he doesn’t have a stadium named after him. They used to call that usury. But Citibank conveniently moved their credit card business to South Dakota in 1981 since they have don’t have usury laws. Hence they can charge whatever they want – and change terms whenever they want. And you can’t do a thing about it – sort of like Sarah Palin. She does what she wants and we are stuck with her.

I covered the shame and thievery that is the American credit card business in this post – Double Secret Fine Print back in November.

I went on line to find the “contract” or “terms and conditions” for my credit card. DOESN’T EXIST – you cannot find it online. If you didn’t save it (and I did not) – tough noogies. I will have to call Shiticard Customer Service (which is in India) to get a copy. And just what is this Default APR? It some sort of squat toilet you are dumped into when the bank doesn’t like the way you give them your money. And you know Shitibank will find anyway to not like your money. If your minimum payment is one day late or a dollar short – they will bounce you into Default APR cess poll!

So lets see – the brainiacs in the credit scoring department at Shitibank raise interest rates on good customers – who, despite small margins – are not a problem. They end up chasing those people off. Or better yet – those same MBAs in scoring raise interest rates on the struggling customers so now they can even pay you less. The bank gets to spend more money chasing those people down.

Let us not forget that the Fed has dropped interest rates to nearly zero. So Shitibank is paying very little for the money they lend you for 30%. They call it risk. We call it greed and a roundabout way to pay for Robert Rubin’s great decisions and $100,000,000 consulting fee.

Time to opt out and move to another card. I am sure Shitibank won’t give two cities.

More fine/excellent/wonderful blogs to visit:

FranIAm
It’s My Right to be Left of Center
Pulp Friction
Bells On
That’s Why
Liberality
A Feather Adrift

oh go visit all of them – they are all terrific.

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Responses

  1. Credit cards are truly the devil’s work. Mrs. Snave and I have racked up massive debt with these mephistophelean devices. I posted at my place about the latest crimp in our effort to get out from underneath the cloud.Good job paying yours off immediately. It’s just too easy a trap to get into, thinking you’ll be able to come up with money to pay off big purchases… and when the money isn’t there, the interest accumulates, etc.If we can get our credit cards paid off with extra money from a home refi we want to do, we will cut up two of our cards and close those accounts, keeping only one for use in purchasing our medical prescriptions. That way we can do it the smart way, as you do, and keep the damned thing paid off.

  2. snave – they are truly the devil’s deeds – i am sorry for your troubles with them. i hope you can find a way to get them paid off – and stop giving citibank your hard earned money

  3. Do we no longer have usury laws? Time to reenact them then. Have to note that I know a couple that had a home equity line of credit with Wells Fargo. Had the line, because they came into a little money and paid the whole thing off, along with buying a replacement car in cash (needed to get one anyhow) and paid a bit off the mortgage. Responsible, no? Anyhow, one of them bought something at a store but had to return it. In the interim the credit card bill came in (different company) and they ignored it because the item was returned, so the net bill should be $0. Except that the return was a nanosecond after the cycle closed. Now they owed the credit card company nothing because of the timing. That wasn’t the issue. No, what happened was that the geniuses at Wells Fargo told them that because of that little credit card issue they were withdrawing their home equity line. Got that? They had already paid it off in full at a time when people are struggling just to remain current, but they are a credit risk. Unfuckingbelievable. Except it is.

  4. piny – why does that not surprise me — credit cards, Fair Isaac, scoring, the terms and conditions – ALL BULLSHIT – it pains me when i have to pay to take my own money out of an ATM from another bankfucking nickeled and dimed to deathso John Thain can spend $12,000 for a toilet that cleans his dingleberries.

  5. Oh, DCap if this is your first troubles with them congrats. I remember when if you were late with a payment they would send you a friendly reminder letter and as long as you got it in before the next bill you were okay. Now there are so many schemes to make you late, from mailing out your bill at a point where you are likely to be late mailing back your payment, to changing the date of your payment online if you are not paying close attention so they can then hit you with a $39 late fee which then accrues interest. I was once told I accrued a late fee because my payment was posted 15 minutes late at 12:15 pm. Now I know years ago banks considered anything after 2pm to be the next day’s business, but with our 24/7 technical world that would seem obsolete. And you cannot argue with them. In January 08 I took money out of my IRA to clean up some bills post divorce. I sent a many thousand dollar payment to a credit card which was ONE day late due to a delay in clearing the check. 5 months later I called the card to beg them to lower my interest rate so I could continue to afford to pay them. The initial person pulled up my account and said no, because I needed to show 6 months of on time payments before I could get my 29.99% lowered. I asked to speak to the supervisor/credit counselors and she said “I’m sorry, you’re not eligible to speak to them”.So for all of this advice to call the cards, be proactive and tell them upfront that you are having difficulties….how can you do that if they won’t even talk to you. I have never been more than 2-3 days tardy on my cards. And yet the first reaction, no matter how long I have been a cardholder, is to bump my % up to the max. No consumer loyalty here.And I am righteously pissed that as WE bail them out and pay ridiculous amounts in charges and fees they are borrowing money at zero or 1% and lending it to us at 24 or 29%! I was raised to pay my bills and be responsible but I have lately been tempted to walk away from it all, especially watching the grasping, gimmee, gimmee policies of the bankers.

  6. rhode – i hear you! i know my problems with citibank are small in comparison to some (like yourself) – but the pains these banks go to – to get every nickel, even if unethical or immoral (but not illegal) amazes me – and they wont even talk to you! – i have never heard of “you are not eligible to speak to them”if they said that to me they would have not been happy

  7. Ugh. Loathesome mother f*ckers.You bad man- you paid your bills and this is your just dessert!As you know, I had rung up some pretty monumental debt. I am nearly – but not all the way – paid off. I paid off my higher interest cards first and now am working on the lower inerest ones.In November, I was paying my bills – something I do on time all the time and I knew I would be busy with Thanksgiving, so I went ahead and made an online payment to Shitibank for that card.That was to cover me for December. In early January I received a robocall from Shiti about my “late payment.” WTF?Turns out that I paid my bill too early so the money I sent got credited to the month before and December was late.Needless to say – there was a hefty late fee and my interest went from 8.99 to 18.99!After several conversations with two supervisors the fees were dropped and my interest rate was restored.Who knows though – I may get a letter like you did really soon.

  8. The money I’ve paid over the years to Citigroup is truly tragic. It’s fascinating to come across another account like this. I’d love to see some sortof legislation passed to require more ethical practices (namely their insepid fine-print.)

  9. franiam – pay TOO early and they charge you – you have to be friggin kidding……at least you were eligible to be talked to.nina – good luck on legislation – not going to happen – our VEEP is one of them… one of those pod people

  10. Hi Cap;You describe the workings of modern banking to a t.I find that using an ATM or cash is much better and use only a credit card when there is not much alternative, like purchasing flights online or renting cars.The sad part of this is they are not only sticking you in the back end, but anyone who accepts credit cards pay a percentage of the purchase for the luxury of you using credit.When vendors wise up and give people 5% discount for using cash or debit versus a credit card, we shall see some major changes with the credit card industry because the consumer won’t let that pass by in this day and age.

  11. Well, I have never either heard I wasn’t eligible (or worthy) to speak to the next higher up, but that must be the new gimmick since before they hoped that most people wouldn’t know enough to push upward through the layers of supervisors. They’ve trained them pretty well though, there is no way in hell you are going to be put through. I don’t cry easily, but I was in tears that night. Here I was doing what all the credit counselors tell you to do and be proactive and I was dismissed out of hand.They cannot get blood out of a stone. But I do need to heat my house, feed my kids and drive to work and so I keep my payments up because one hiccup and everything tumbles. Apparently they don’t care if the whole middle class falls as long as CEO Thain can redecorate for 1.2 million and former CEO Sandy Weill can borrow the corporate jet to fly family to a $12K per night resort.

  12. ichabod – some merchants do that – give you a discount for cash – and i LOOK for them. these credit card companies make more money than god – and because they will give a credit card to anyone that farts – they are starting to see the problems of not vetting their customers — hence good customers take the risk for the bad customers.wait till they ask for TARP moneylook out

  13. rhode island – i feel for you – these are vultures – and people like thain (no matter his apology) WANT to have a two-classed america — but until we get angry – very angry – the changes will consist of giving TARP money to banks and watching it disappear down the Bush-rat hole

  14. And yet DCap, all of these people who want to crush the middle class (like our illustrious bankers who while accepting the American peoples tax money were begging the government for more Visas for foreign workers to fill slots such as senior Vice President, market analyst, etc to the tune of average salary of $90K….so they can take OUR money but not give AMERICANS the jobs?)will be the ones who scream the loudest when the police can’t respond right away to their problem (damn kids on the lawn) or if there is a slow firefighter response because they have broken all the unions and privatized public services to the bare minimum. I’d love to see one of these “Masters of the Universe” or “Captains of Industry” risk their lives like Police and Fire do every day in service to others for a starting salary of under $30K. Or even go out of their way to help someone, anyone, but themselves and their cronies.

  15. I never minded what the banks did too much when it was on THEIR dime but now everytime I read about how they are screwing the end using while asking us all to fund their screwing……..it makes me feel like I guy sponsoring an all expenses paid orgy at the Mustang Ranch and being the only one not getting laid. Oh….but I’m getting screwed alright!

  16. that would be end user

  17. I LOVE talking with the customer service centers in India. They are required to take westerner names- I am Steee-Ven. I can not waive your late charge. the system will not allow me. then you need to ask a supervisor. please hold. I did get this response….your late charge will be waived, no troubles. I work in customer service- so I know how to calmly say, I need this fixed and will not let up until it is. But my favorite response is like in tech support- they don;t help you at ALL, after a lengthy call & at the end of the call, they are required to ask, is there anything else I can help you with?Uhhh Yea…. how about the item I called about and never got help with in the first place?????So when is the shittybank card shredding party???

  18. No wait!! You HAVE to request they send you an account closed notice in writing first, or they won’t send you one for your records!!!

  19. I cut up a big pile of unused cards last month. I keep waiting for them to send me mean letters threatening to cancel the accounts for non-use. So far, bupkis.I paid off the last of a big shitpile of debt early last year. What a relief. Now I have some nice fuck-you money saved up.All the card companies are raising rates. If you never carry a balance, and I don’t, so what?

  20. this is why i never use my credit cards unless i buy something online or if i buy something big that i want to be able to dispute and get my money back. i pay off everything before the due date. they can go fuck themselves before they get an extra dime out of me.

  21. DCap,Remember a few months back I posted here about a similar experience I had with Discover Card?They raised my interest rate by 6 percentage points and when I called to demand an explanation, I was given a pat “In order to serve our clients in this challenging environment, we will be raising the interest rates on our products.”I told them I planned to pay off the smallish $500 balance and cancel the account. Well, that’s exactly what I did. I paid it off over two months and I called to cancel it.Guess what? When I called back and I said I was calling to close the account and I wanted a letter within 2 weeks stating “Account closed at customer’s requst,” they knew I meant business and the rep not only reversed the interest rate but they refunded the difference between my original interest rate and the amount of interest accrued at the higher interest rate.Bizarre huh?

  22. chris – i couldnt have said it any better. If the credit card companies are SO worried about risk – then dont send cards to people who cannot payfran – the shredding party is next month – when i get the letter that confirms the account is closed. but i cant wait to talk to them today and tell them to take their ballpark and shove it42 – agreed – but besides the fact i dont carry a balance – it is these tactics and this mantra that has gotten this country into the trouble we are in – fucking corporate GREED – and if i hear that douchebag joe scarborough talk about corporate taxes one more timenonnie – sadly you do have to use the cards for some things – i just bought new computer speakers yesterday – i charged it and paid the balance in full today.christopher – they didnt believe you and when you acted – they FINALLY took it serious and realized they didnt want to lose a customer – i hope you told them what you thought. they get away with Gestapo tactics because no one calls them on it

  23. Suze Orman has been warning for some time now that this sort of thing was coming. She also said it was one of the most stupid things the credit card companies could do.

  24. Aw hell, let’s scrap all this credit shit and go full-time to bartering.

  25. Well, the one nice thing is if we all decide to go commando and stop paying, they’ll take years to catch up to us.

  26. Ah, citi. Don’t get me started. I just hope they enjoy mowing the acre of the house they are about to be responsible for…..Thank you for the link.P.S. We were in a consumer credit counseling program, but had to withdraw from it to file Chapter 13 bankruptcy. Within one week of withdrawing from the debt counseling program we received at least one credit card application in the mail. Brilliant!

  27. I don’t have any credit cards. I got rid of them about 6 years ago (which evidently is bad for your credit rating, but I took the hit.) I haven’t had any need that I couldn’t meet with my debit cards, including a car rental if you check around enough. I also have been putting $1,000/mo into one account that I use for emergencies and then dump the excess into a CD at the end of the year, so that account balance is as much as most people’s lines of credit.I don’t miss them a bit. No one needs to have them.

  28. thanks for the linkylove there dcap. and yeah, credit cards=evil republican wet dreams.

  29. We have something like 3 Citibank cards of various kinds for various reasons (airline miles or some low introductory interest rate or whatever). We only actually use one of them and we pay that one off every month. So what did they do? They sent us a note cancelling one of our cards since we hadn’t been using it! So they are really on the warpath here trying to figure out ways to lower their risk and raise more money I guess.Those tricky things where they raise your interest rates if you pay late are really nasty. I had one of those “low introductory rates” and transferred another card balane to whatever this card was. Then one month I must have paid the payment a day late or something (it was a fairly large balance – have since paid it off – so I was paying in monthly installments) and my interest went up to, I kid you not, 34.9%!!!! And worse yet I didn’t notice it until 3 months later when I had already paid a whopping amount. Needless to say I paid it off and closed the account.

  30. Not to change the subject but I heard today that Wells Fargo is going ahead with plans for an expensive Las Vegas trip for its management types despite the fact they took billions of taxpayer dollars. Time some of these banker types started hanging from lamp posts.

  31. Oh yeah – I’m planning to cut my Citi card soon, for no other reason than I think they are the worst out there and don’t deserve anyone’s business. A softer landing for the economy will be to have them shrink to non-existent through loss of more and more customers like you and like me.

  32. They really do suck.One of the things I noticed with my Best Buy Mastercard is I better pay wayyyyy early if I’m going to pay anywhere close to due date because they won’t post right away and are pretty unclear as to when they do post things (i.e. “The earliest this will post is Tuesday.”)That’s when paying out of my bank account over the net. Apparently moving those electrons around takes time.Obviously it’s they’re trying to nail me with late fees. The whole thing becomes way to much work for the consumer than it should be.

  33. They are a fat lot of bastards… every one of them.If you’ve ever seen the movie Maxed Out, you’d see an even more sinister side of them. (Seriously, you’d think Dick Cheney was involved in their activities).

  34. if you hate citi, check out the tshirt at http://www.shirtaday.com


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