My credits golden, and I’ve got nothing (so far as I can tell) on that particular card, but I was surprised (shocked really) by the max 27.99% APR Citibank quoted in their “terms of service” bulletin that was advising me of this change, especially insofar as most other cards are begging for my business at 0 to 3% promo teaser rates or fixed 9% +/- rates.
Where do they get the cojones to do this in a low interest rate market? Is it because I haven’t use the card in a while or are they just staking out their right to this amazing level of increase if they choose to implement it?
The rate is probably a penalty rate reserved for people who make late payments. You can always transfer your balance to a lower interest rate card, if your credit is good.
(Another possibility is that something weird has come up on your credit report and yoru credit card company now thinks that you are a bad credit risk. Not likely, but worth checking out.)
I don’t know where the cojones come from, but BankOne has them, too. I just got an increase from 8% to 28% and an addition of an annual fee.
On my notice it said that if you give them written notice that you deny the change in your membership agreement, you can keep the same rate on your current balance until you pay it off, IF you never use the card again. I sent them a nice F-You letter doing so.
If it’s a card you haven’t ever used before, (or not for a while) I wouldn’t worry to much about it, especially since you’re probably getting better deals in the mail on a daily basis. It does give you the opportunity to get a free credit report, though. I’d go ahead and get one and make sure nothing’s out of whack that would have made them do this.
WTF, me too!! I saw this and immediately transfered the balance to another card, cut it up, and sent it back to BankOne telling them to close that account. Screw that, I’m not paying that much for interest. I’m now down to 3 credit cards because of that. Feels good to have a slightly thinner wallet, even if the balance is simply on another account.
Must be some kind of credit card trend. Our credit card company just did the same thing, just not as drastically. We were able to negotiate three months (out of the five that we didn’t notice) of the extra interest rates back as a credit and transfered the balance to a new card.
That is likely it, right there. Based on my experience working in the credit card industry, they are probably trying to get you to close your account if you’ve had it awhile and have not used it. They’re not making money off you, but it is costing them money to keep your account open.
But, it can also be that when they reviewed your credit (as most companies do at least once a year) they probably saw something they didn’t like (for example, being late on *another card * can cause them to boost your APR). Or, they may have seen that you have lots of unsecured credit that you’re not using, and are trying to get you to close your account because of it. (Lots of unsecured open lines of credit with plenty available is not always a good thing.)
I’ve read lots of places to have only two majors (or one) and a gas card. Keep the cards open that you’ve had the longest (if this applies to you) and close all the others that you don’t need.
Remember that a large part of your FICO score is the ratio of credit utilized to total available credit. Some say the golden percentage for highest FICO score is between 5% and 15%.
Just keep this in mind when you think about closing those accounts.
My credit is absolutely pristine, but I see your point re the cost of the unused account and the open credit. I’ve paid down a lot of credit cards over the past year of so because of my accountant’s nagging, and my unused lines of credit card credit are well into 6 figures at this point. I’d close them down, but in the back of my mind is the notion that I might need them again at some point.
It’s interesting (and vaguely amusing) that I’d be considered a “pesty” customer by paying my bills on time.
Yeah, the credit card companies kinda getcha coming and going!
Their idea of the perfect customer is someone who carries a balance and pays over the miminum - on time - every month. That way, they make the most money with minimum risk. Jpeg Jones’s point is a good one, too.
FYI…I’ve been there, done that, concerning cutting up the card and wasting a stamp sending it back. Believe me, the CC company will drop that sucker in the trash. When you cancel a card, tell the mook that you demand a written receipt confirming the cancellation. If it doesn’t show up in a few weeks, call them again. Until you can prove it’s been cancelled, it will continue to show up on your credit report (even though it is an unused account).
