I remember somewhere recently talking about how my Citi credit card had an insanely low rate, like 8.5% or something in that neighborhood. Well I noticed that my statement this month had it at 15.9%. Ouch!
So I called to bitch, and they mentioned the updated terms that they send and I more or less ignored. But I could "opt out" if I wanted. Lucky me! It meant I'd get the old rate (prime plus 4-something) until the card expired, November 2010. So, um, yeah, do that. I don't care if I have to ditch it after that.
That puts it under 8% now, which is convenient since I'll carry some balance on it until my tax refund rolls in (honeymoon travel). But no wonder they can't get people spending. If they're going to jack you and you're a good customer with a high credit score, it would seem you'd put that low-risk customer in a good value rate. Idiots.
You have a good point, but seeing that Citi isn't making much money off of those who can't/aren't paying their credit cards they need to make their money somewhere. That's where good, honest people like you come in. Kind of like the government using our tax money (because we're paying it) to bail out those who can't/aren't. :)
Catch-22.
I understand why they are raising interest rates. But that doesn't mean I'm going to pay a higher rate. And losing customers who do pay their bills on time and pay a lesser interest is losing them money. Don't try to screw your loyal, good, customers.
Saying we'll only end up paying for it through taxes in the future due to the government bailing them out isn't a sure deal either. It was done once, but will it be done a second time?
Citi is apparently taking a chance.
It appears this is happening across the banking industry. I received a notice today that Chase was changing my rate from prime (3.25%) to p plus 4.99% effective April 1. Needless to say, I did exactly what all of you have done and declined the offer, closing the account. With real interest rates at nearly zero, they can still make a reasonable return on paying customers between the rate spread and discount fees they earn on purchases. If all they want to do is bottom feed in the future, so be it. They have always had the ability to price to risk. Seems to be just another example of how poorly managed the financial industry is today.