Banking News: Citibank (NYSE: C) Credit Card Interest Rate Hikes Infuriate Consumers
American Banking News recently reported that Citibank has sent letters to untold numbers of customers with good credit that their interest rates will be raised to 29.9%. Customers that received these letters have made their voices heard and are not happy about Citibank’s recent rate hikes.
One of Citibank’s former customers, Michael Garvey, left this comment on American Banking News, “Customers have memories. We won’t forget. Banks that are raising such rates to absurd levels, while at the same time borrowing public money, will feel the pain when we refuse to do business with them for years to come. Goodbye to this customer FOREVER – not just on cards – ANYTHING that is associated with your company.”
Another Citibank customer using the alias, JP, commented “I received that same letter yesterday. I WILL ["opt-out"] CLOSE MY ACCOUNT and NEVER, *NEVER*, NEVER do business with Citibank again! It’s mafia level customer service! (As in: It’s business, not personal.) HA. If I ever get back on my financial feet again they are the last place on earth I will entrust my money to! You can’t get blood from a stone, you know. Let’s all go bankrupt and see where the cash comes from then.”
“I’ll never bank with Citi again, nor will any member of my immediate family,” said a commenter named Jonathan.
A customer named Spencer shared this story with other American Banking News Readers, “My mother received this letter on Saturday 10/24/09 that the rates would increase to 29.99%. She has been a Citi customer since 1969. If she wants to keep her rate at 13.24% she can close her account and make current payments. She is on a fixed income and not much more than social security so I help her with the payments. With the raised interest rate means raised minimum payments. We have been paying at least 20% above the minimum payments. This is how they treat long time customers. Oh wait, there is a catch. If you pay on time each month they will give you a 10% interest reduction each month. Can they raise interest that much on existing balances? How much more money does Citi want from the feds?”
Another commenter added, “I own stock in Citi and while this “maybe” good for me in the short term, this is just bad business for the long term. I think this is dishonorable and greedy for a company to act in this manner. This is appalling behavior and CITI should be ashamed of taking advantage of the public while in such a delicate state. Glad I don’t bank with them nor will I ever for their lack of integrity.”
Citibank customers have made their voices clear on American Banking News and other websites. Consumers are not happy with arbitrary and unfounded interest rate increases and unannounced cancelling of credit cards. Unsurprisingly, there were no comments made that applauded Citibank’s actions.
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Great post but complicated to understand since I am from Faroe islands ;-) 
What would be your top three tips for anyone new to this topic?
Who cares if they raise rates to 99.99 percent? If you don't charge more than you can afford to pay in full each month (otherwise known as living within your means) they won't get an extra cent.
If we want to live beyond our means? that's our business. They are not raising interest due to a “financial goal” they are doing it out of GREED. They are doing it becuase of the new law coming next year.
THEY JUST WANT MONEY and SCREW the CUSTOMERS !!!!!!!!!!!!!!!!!!!!!!
I received the same letter and think that this is incredibly unfair to all of their good standing customers. I have had this account for a long time and am appauled at the thought of being charged 29.99% interest while they (Citibank) evade taking responsibility for their own irresponsible lending practices that caused this whole mess in the first place. Why should responsible borrowers have to bear the brunt of this mess??? And the flip side to this is that if I do “opt out” of this new rate, they will close my credit account and in doing that, reduce my credit score. Unbelievable that they think this is an appropriate way to do business.
I also have a credit score in the top 2% of consumer and pay my bill in full almost every month – occaisionally I let a few hundred sit over to the next month. I've a $40,000 line of credit with CitiBank due to my stellar credit rating and my impecable payment history. Regardless, I refuse to do business with a company that charges essentially a 30% rate. It's NOT about paying your balance every month – even if you do this you will be charged because these cards charge a “daily” rate that accumulates from the date of the actual purchase. Just pay the amount in full every month and you STILL see an interest rate charge. I don't begrude them a few bucks to charge for managing my account but this is plain stupid stupid stupid. I just closed my account today – I can find many many other credit card companies willing to give me a card from 6% to 12.9% max – why does CitiBank think they can charge ME 29.99%. They just lost a high end customer due to their greed.
So, we have banks paying interest OUT at near all-time lows, we are giving CITI our taxpayer money and THEN they raise the interest rate to 30%? Don't believe for a second it will stop here – those of us that pay our bill in full on time will soon see a “convienience” fee added to our bill – a monthly fee for the “right” to use our card. And I don't know this for sure, but I strongly suspect if you “opt out” of this rate increase or cancel your card, you will lose your mileage, reward points, etc. If they do give you notice, you will likely get only 90 days to use them. If you have a lot of accumulated miles, it will be difficult to use them all in a short period of time.
They are making the rules as they go. It's a shame.
Write your congressman, your airline, and start spending those CiTi Bank awards.
Another long standing customer is going to opt out due to Citibank's unbelievable short sightedness and greed. Bye bye and good riddance.
I got the letter too. Mine said I had a choice. Transfer $5000 in debt from another account to my Citi card or have my interest raised to 20.9%. Isn't that blackmail?? They want me to put MORE debt on my card in order to keep the same interest?? What kind of crap is that???
I got the letter jacking my rate to 21.99% and I'm really angry about it. I've been with Citibank for 16+ years and have a FICO of 800+. I charge $1000s every month and pay it off immediately. I told this to the customer rep and they didn't care one bit..business decision due to the economy. Not a very smart one when it comes to a customer like me. I opted out and will never do business with Citibank again!
I am also a customer of Citbank, perfect payment record, stellar credit. I received my letter today telling me that my interest rate is going from 5.24% to 29.99%! This is beyond what I thought could happen legally in America. Of course you have to be careful before closing an account if you need a good credit score, because the equally unfair scoring model basis a significant weight on length of payment history. If you cancel a long-held card, you could face a serious score decrease and be surprised with a decline the next time you go to try and buy a car or especially a house. I will go back to paper statements, only charge $1 a year on the card and pay it off immediately in order to keep the card active, and make sure they spend more money on me than I am worth to them. I am also starting a letter campaign to my senators and representatives and posting on all my networking and group sites notices hoping friends and family will join me in boycotting Citibank. I hope we put them out of business as a lesson to other corporate loan sharks.
I got a letter yesterday as well but mine is being raised from 11% to 15.99%. I told them I would “opt out” and find another card. The best they could offer me was another 6 months at my current rate which would not make a big difference anyway. I will find another card with a lower interest rate. I told them that they would lose MANY good customers for jacking up rates when customers paid on time and had been with them for years.
I have been a Citibank customer since the late 90's and currently have six accounts with them, and nearly $40k in credit available. I just received notice from them that they will be jacking my interest rate up to 17.99% at the end of the year, and I will be providing them notice that they are going to lose all of my accounts.
Have had my Shittybank card for 20 years. Good standing all the way. Over the years I've had to constantly monitor my rates as they fluctuate, and now this. I'm done.
Same here, called them they said they would lower to 9.99% for 6 months then change it. I told them to stick it where the sun don't shine I would pay my balance that day and I looked forward to seeing them going bankrupt, maybe someone with sense will buy them. Never in 10 years late, never used 50% of credit line.
Mike
I got the same letter – I have never been late and my interest rate got bumped to 19.99 percent w/ 29.99 percent penalty rate.
Screw em – I paid off my balance and opted out.
A couple weeks back, Citi sent me a letter raising my rate to 19%. I called w/i three days and closed my account. Get this. I had $1600 built up in my drivers edge account–they pay that whenever you buy a new car–and the operator dangled that in my face to try to get me not to leave Citi. (She also offered not to raise my rate, but I was so hacked off I just closed the account.)
After that experience, I was wondering why Citi was urging decent, paying customers toward the door in favor of those who, because they could not repay the company, would stay behind and eat exorbitant interest rates.
Now I see the company is exposed on $1.9 Billion in debt in the Dubai debacle. Anyone making brain waves could have told you Dubai was overbuilt. What were the alleged risk managers thinking?
The truth is, Citibank is just a poorly run company trying to get its own customers to pay for its horrendous mistakes. If the comments on this board are any indication, the company is failing even at that. Eventually, it will get what it deserves, which is to be broken up.
This is no different than the housing bailouts for all the deadbeats that bought WAY more house than they could afford. This is the bank raising the rates of the people who pay their bills on time to cover for those that cant. Same as the locked or lower mortgage rates ffor the housing deadbeats while those of us that pay our bills get nothing. I apparently dont qualify for a lower mortgage rate because I pay my bills? WTF?!? I am also getting rid of all credit cards and especially CitiBank. I fear this is only the beginning and a lot more places will follow suit before the feb 22 deadline!
Same here. The rep on the other end of the line kept ensuring me that it wasn't a reflection on me, seeing as I've never missed or been late on a payment in eight years. That only enraged me more. I will never, ever do business with them again. Increase to 29.9% from 8.24% is outrageous. I'll be looking into getting a line of credit with my local credit union as soon as possible.
ditto to the previous comments, for the most……….
i have been a customer of the citi group for over 10 years…..
never been late, carried high balances, paid them off…..used their card as my main card, for every thing, including utility bills, wireless service and so on, as i enjoyed their cashback rewards program….. my monthly payments are made via auto-draft and i always paid/pay an additional amount
first citi raised from their apr 9.85 to 14.99…then came the recent letter of another 15%…bringing their apr to 29.99%….. i can see why citi posted big losses their last quarter and i expect the same similar losses to be in their future quarterly reports….
normally i do all banking online, but i am undecided whether to close my account via phone or just close it on line…..it has been since may of 2006 since i last spoke to citi customer service rep…i wonder if they still are in our country or they jobs have been 'farmed out of country”
I have been trying to get my wife to close her Shiti bank card for years especially after I noticed my sears (shiti bank) card rates were on the constant climb and the last rate increase to 29.9%. Her argument has always been “I’ve had this card since high school and I have a zero balance” well I got the mail last week and was very excited to see Shiti Bank has decided to add a $60 annual fee to her card unless she caries a $2400 balance. This was the best news I’ve seen yet and was enough to convince my wife to pick up the phone and get rid of these scumbags!!!
I have been trying to get my wife to close her Shiti bank card for years especially after I noticed my sears (shiti bank) card rates were on the constant climb and the last rate increase to 29.9%. Her argument has always been “I’ve had this card since high school and I have a zero balance” well I got the mail last week and was very excited to see Shiti Bank has decided to add a $60 annual fee to her card unless she caries a $2400 balance. This was the best news I’ve seen yet and was enough to convince my wife to pick up the phone and get rid of these scumbags!!!
Its absolutely disgusting to see how they keep increasing the rates so often