Is It Time for Me to Pull My Money Out of Citi?
November 18, 2008 by Miranda Marquit
Filed under Finance
I have a high yield savings account at Citi. I also have a Upromise credit card with Citi. But I’m starting to wonder if it’s time to pull back business i’m sending to Citi. The company is kind of ticking me off a bit. First of all, the Citi is slashing jobs in an effort to stop the hemhorraging it has been doing in terms of cash. I can see that. Cost cutting is an effort to save oneself.
But, while cutting jobs in large numbers seems to be a no-brainer, Citi can’t seem to make the decision to cut executive bonuses. While major banks from Barclays to Goldman Sachs to UBS are lining up to show us they are ready to “sacrifice“, Citi appears to be having a crisis about getting rid of executive bonuses for this year. (BloggingStocks believes that taxpayer bailout money could go to Wall Street bonuses.)
But the real clincher for me is this: Citi plans to raise interest rates on its credit cards. I don’t normally carry a large balance, but the move still bugs me. Credit card companies have been making some noises about raising interest rates due to the economic times, but most have been reluctant to do so in light of recent Fed rate cuts. Indeed, most have been doing the decent thing and lowering credit card interest rates.
Not Citi.
Consumerism Comentary reports that Citi will be “repricing” rates two or three percent higher. For those who do carry balances, or who are trying to pay down some of their debt, this is not going to be pretty. If your interest rate goes up, it means that more of your payment goes to interest, rather than principal, slowing your debt reduction plan and meaning that you pay more in the long run.
It seems a little backward — and blatantly self-serving — that yields on the savings account are going down while the interest on the credit cards are going up. We’re all having a hard time, Citi. But you’re making it even harder for the rest of us.
What do you think? Is this reason enough for me to ditch Citi and put my money elsewhere?
image source: Citi Web site
Kick Citi to the curb. Credit card companies are allowed to change rates whenever they want to (as long as they provide you with notice) but when overall rates are down the savings should be passed on to consumers!
I’m giving it serious thought :)
At 29% interest, I’m cutting up my CitiBusiness credit card and paying off the balances! I have an American Express card that I save for emergencies, that has the same ridiculous rate. I can’t imagine an emergency that would get me to use it!
Thanks for weighing in, Jean. Yikes! 29%? That’s ridiculous for a business credit card.
Get rid of this card. Your just adding more debt than you should. I don’t believe that you should close this card, the reason being that it could hurt your credit score. I don’t know if this is true or not it is just a rumor that I have heard. I would still pay off the debt and then just cut up the card so your not tempted to use it.
Thanks for your input, Jerry. I don’t really carry a balance on the card, but it still annoys me. And I agree that getting into further debt, especially at this time, is a bad idea. And you are right that closing the account — especially if it is long-standing — can impact credit score. But it depends on individual circumstances.
You have your thought process on point….you know what to do!
2-3% – ha! I just got my letter and they’re raising my interest from 9% to 17% on December 3rd. I have no balance so it’s goodbye to Citi. I read on another sight that some went up to 24% – are they basing it on credit scores? I’d like to know how it’s being calculated.
It’s based on Citi trying to increase revenues. They can raise rates whenever they want — for any reason they want. It’s the card agreement. It’s ridiculous to be socking customers with these rates. Especially since Citi just got a bailout, and Fed rates are down.
They jacked me from 8.99 to 24.99%! I have been a cardholder since 2004 and have always made my payments in advance of the due date. This is the thanks I get! Yet I read today that they are keeping their $40 million naming rights to Shea Stadium! What a joke.
Nice, huh? It doesn’t matter; Citi will still jack you up. I’m wondering how we can organize a boycott. I haven’t got my letter, but as soon as I do, I’ll be taking my high yield savings account elsewhere. Somewhere customer loyalty is appreciated.
Never payed late have a good credit score but the rate goes up from 6.99% to 24.99%. Called them and asked why, the answer was ” Because we think that is what we need to become profitable again”
I opted out and will cancel my account with Citi. They also told me that it is my fault that I have a balance, but did not comment on their fault to do profitable banking to start with.
Nice, huh? They get a bailout for their bad business decisions, but we don’t get any help. They’re all about telling us our decisions are our fault, but we still have to bail them out — even while paying higher interest rates.
I, too, have been a victim of Citi’s interest rate hike. Well, I told them to go take a hike. A loyal-to-a-fault customer of 17 years with an impeccable account history has just had my APR rate jacked from a 7.9 FIXED rate to a 14.99 VARIABLE rate. I will now have to take a hit on my credit score (largest credit line and longest held account) to avoid paying them back one more cent than I will have to, on principle alone.
I called several times and got supervisors on the phone, pleading with them to explain what I had done as a loyal customer to deserve this. After being fed (numerous times) the canned speech it seems all have received, I pointed out to her that the money lent to me had already been lent to me long ago (expenses in photography school that were not allowed to be bundled with student loans.) Therefore, if it now costs them more in this financial market to loan money (as explained in canned speech), shouldn’t this new rate solely apply to NEW purchases ONLY??
No answer for that. So they take our hard-earned tax dollars from the government because they made horrendously risky business investments and then turn around and do exactly what they promised the same government that they would not do JUST LAST YEAR: raise interest rates for no reason? (Anyone familiar with “a deal is a deal?”)
Now I hear that they “simply cannot” opt out of a $400 million dollar deal to place their name on the new Mets stadium AND the high-level executives who got them into this mess are still going to receive their bonuses?
You have to be kidding me? Someone remind me what country I live in……please.
WRITE YOUR REPRESENTATIVES PLEASE!!!!
I agree that this whole thing is an outrage. We keep giving and giving and it’s never enough — but we don’t get anything in return. The sad thing, Lisa, is you’re one of the lucky ones who has the rate going “only” to 14.9%. I agree that their excuses sound false. Unfortunately, though, logic isn’t going to work here. Greed overrides all.
Citi Bank customer for well over 20 years, wife had some medical problems last year so we were a little slow in paying. They jacked my rate to 30%. Needless to say I paid off their credit card and had them canel my account. I also had them notify the credit agencies that my account was canceled.
Last month, they took over my wife’s Sears card, which we promptly cancelled. I will never do business with Citi again.
It appears that these predatory Banks will get your money one way or another.
Thanks for sharing, Ed! I was very happy to get the announcement that Upromise is switching to Bank of America. I have always been very satisfied with my BoA Visa, and I was agonizing over the Upromise credit card. Now, happily, that’s not an issue. I’ll move my savings from Citi and put it somewhere else. Maybe ING or Emigrant…
Yup, same situation… Just got a letter from these “sharks” stating my rate is going from 8.99% to 24.99% – are you kidding me Citibank… Seriously, is there a hidden camera around here somewhere? I am/was a loyal customer always paying on time and gave more than the minimum when I could. Now, you excpect the average American, in these times, to pay more than DOUBLE there original payments to you.
In case you haven’t noticed, WE ARE ALL STRUGGLING – doing this crap doesn’t help in the least. Consider one less customer here Citibank, thanks for the hikes to show us all what sort of buisness you are really in!
I took great pleasure in opting out after I got my letter today. The clerk I talked to on the phone couldn’t have cared less, even though I’ve been there for years and was never late, yada-yada…
Everyone who gets one of these stupid letters should opt out. Citi should have gone BK in my opinion. They are the ones who made lousy business decisions, and I’ll be damned if I am going to pay for them.
Let them have the slug accounts. Those of us who pay the bills should pull the rug out from under them.
Great plan! If everyone decided to opt out, then it might make Citi think twice about policies that are so detrimental to good customers.