Well, it's about time the MSM got the word about this out! I got my notice weeks ago and already called Citibank and gave them an earful. Make sure you call them and tell them how YOU just bailed them out and that they have some balls Jacking you up like this. (of course in nicer words than that but you get the drift). They lowered my rate for 5 months and told me to call back after month 4 and they would "see what they could do". I told them I would, BUT if they "Jack" me up at that point I take my "Excellent" business elsewhere.
Citi told CNN that anyone unhappy with the new rates can opt out and continue paying the lower interest, but they must close their account when their card expires. It's all in the fine print.
What they don't tell you is that if you opt out you have to pay the balance in full upon expiration date of the card. My card for example expires on 12/31/08I hope to have them paid off by July of 09.
When I got that info in the mail, that my rate was going from 5.99% to 18.99% I called them and said something along the lines of "I've had this card since 2004, always paid off in full, always had a low APR of WELL below 8%, why is it going up so much?" And the guy told me that they did it across the board, but since my history looks so good they can lower it down to 7.9%. It was 2% higher than it last was, but it was still over 10% lower than what they wanted to. Typically if you get one of those letters in the mail saying your APR is being raised, you can tell them that you're leaving them and they'll lower it down real good.
Too bad about a week after I did that I closed all my cards anyways. Oh well, maybe they should have offered 0%. They never made any money off of me anyways, and I'm sure their computers showed that.
ETA: I didn't call the Opt-Out line either, I just called regular customer service "to see if something could be done about this.."
I was watching GMA this morning and they were talking about it. I don't have cc but they were saying that the new laws would make it harder for people to get credit cards because they will not be able to milk the people who are paying and in good standing for the ones they give cards to that do not. I think this is a good thing. People are going to have to learn to live within their means. I also think that it will in the long run make prices go down because people will not be able to afford the things that they can afford by putting it on credit.
One of the main reasons to get rid of cc debt. At 18.99% people won't be able to make their payments. It's incredible that the cc companies can raise their rates that much higher.
This is why I watch my cards like a hawk. My one MasterCard is Prime + 0% so my rates should be going down. My Discover Card has had a fixed interest rate since the late 90s. It's never changed since then. I don't carry a balance on that card.
I'd imagine when more people default now due to them doubling their interest rates they will be back looking for the TaxPayers to bail them out again! As it is, ANY of my "politicians" who voted for the bailout the last time are NOT getting my vote come election time. They are supposed to be doing the will of the people (majority of who said "NO Bailout!"), not the will of the lobbyists who line their pockets!
I've had 5 cards closed in the last 2 months. They were not used in the last couple of years.
The banks are de-leveraging from the credit bubble. They are on a life line from the governement. Pulling credit lines are increasing rates are all just part of re-balancing their risk model. Banks, like many people, are hunkering down and trying to make it through these tough times.
I know it doesn't seem to make sense, but if you look at their balance sheets, and off balance sheet assets and liabilities you can see how they risked their companies by leveraging up (taking on too much risk) way too high.
We are going to have to adjust to a way of life that involves less debt in our lives and that will mean less leverage and a lower standard of living.
I disagree that it means a lower standard of living.
Living beyond ones means (which is what one does when one borrows to buy things they couldn't pay cash for) isn't setting a standard of living, its faking one.
This is a good time for people to start ditching those cards and getting prepaid CCs in their place. If you really need a CC to make purchases online, then just have the cash to pay for the item when you make the purchase. A CC really should just be used as a placeholder for an item that you can afford.
I don't think of debt as lying from the side of consumption or using debt. I see debt as trading future labor (human effort, hours of your life, remember the book your money or your life?) for credit right now. Some people are fooling themselves, or creating a delusion that debt can help them live beyond their true means for a period of time, so maybe they are lying to themselves about reality?
Now if you want to discuss commercial banking and where the loan money comes from then I would say that side of the equation is deceptive, unfair, unjust.
Unfortunatley, as a country we take on debt to be paid by future generations which is even a more horrible thing to do than just putting yourself in debt.
"..and that the principle of spending money to be paid by posterity... is but swindling futurity on a large scale."
--Thomas Jefferson
I think of debt as a new form of slavery. So many people go to work to turn the majority of their human labor and hours of life into money with interest to be given to banks. Yes, people work to eat and consume things, but so many spend a high percentage of their labor to just pay money to banks.
"Money is a new form of slavery, and distinguishable from the old simply by the fact that it is impersonal - that there is no human relation between master and slave."
-Leo Tolstoy
Where a slave in the old sense would give labor directly to the master, now we are free range (chickens or slaves), that gives us more of a sense of freedom. We get to go out and work, get money, and then hand it to the masters.
Prov 22:7 "The rich ruleth over the poor, and the borrower is servant to the lender."
It's more like indentured servitude. After all - real slaves don't volunteer for the position.
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