As the announcement of the U.S government's stake in Citigroup draws near, the following letter that my mother sent to North Carolina (their residence) politicians and Citibank executives -- seems particularly relevant. It seems that Citibank has decided to increase the interest rate on my grandparents' one credit card - from 5.74% to 14.99%. My 88 and 85 year-old grandparents pay their bills on time, have good credit, and have been responsible with their money for eighty-eight and eighty-five years. That's why it's extremely disheartening that there isn't anything that we can do about this.
My grandparents aren't alone -- a quick look on Twitter and the comments in this blog post shows other folks talking about their own massive interest rate increases on their Citibank cards. Sure, credit card companies can increase their rates. That's why variable rates exist. However it's the across the board increases to all customers regardless of their credit and payment history (and age!) that has us outraged. During the election there was a lot of talk of not using a hatchet when a scalpel is needed. It seems as if Citibank just brought out their hacksaw and blunt hatchet.
As my mother says in the first line of her letter, she doesn't expect any changes from Citibank -- she only wants to be heard. It will be interesting to see if any of the parties involved (and the politicians) respond.
We don't expect any actions as a result of this letter but to bring to your attention what we feel is a situation where even though no laws have been broken, in these economic times, these actions taken by Citibank seem irresponsible and contrary to President Obama's strategy to get us out of this financial nightmare. Our elderly parents (88 and 85) have only one credit card. It is with Citibank. As of their January 2009 statement, their credit card interest rate was raised from 5.74 % in December to 14.99%. They have excellent credit and have always paid their bill on time. They use their card responsibly. When contacting Citibank to inquire why their rate had so dramatically increased, they were simply told it was to cover the cost of doing business. They also informed them that all their customer's credit cards interest rates were raised.
Citibank gave our parents two options, accept their rate or opt out. Opting out means that their one credit card will not be renewed next year by Citibank because our parents will not agree to the outrageous interest rate Citibank has decided to assess them and the rest of their credit card customers.
The real purpose of this letter is to make sure we are not silent when companies like Citibank go to Washington and give lip service on all they are doing to use the TARP funds to help the American people.
Their actions speak louder than their words.
Copies sent to:
NC Senator Richard Burr
NC Senator Kay Hagan
NC Congresswoman Sue Myrick
NC Congressman Mel Watt
OCC Customer Assistance(Treasury Dept)
Citibank Chairman: William R Rhodes
Citibank CEO: Vikram Pandit
Citibank CFO: Gary L Crittenden
Citibank PR: Kristen Kaus
Follow Mena Trott on Twitter: www.twitter.com/dollarshort