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.
Dear Sirs/Madams:
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
OUTRAGEOUS!
Worse than the Ridicules Bonus Scams, the Derivative SCHEMES, and the FIXED CREDIT DEFAULT CASINO GAMES!
Exactly why our ECONOMY is in a shambles!
Illegal naked shorting is now being regulated so Morgan Stanley driving a stake in the Heart of FORD as they and Goldman have done to many other companies.
SEC put a halt to short selling of financial stocks, why not protect the manufacturing base? WStreet keeps playing same old dirty games. (Thanks GardenerNorCal)
It is not OBAMA, but it is SHORTING that is ruining our Markets and they make large Fortunes doing it!
This should be regulated and made criminal during this CRISIS and perhaps permanently!
Where are the NEW REGULATIONS ON THE MARKETS????? WHERE ??????
This must be stopped or we will never recover!
Holder should investigate this and Congress should take testimony!
More costly and damaging TRICKS and SCAMS by these Big WS Banks/Hedge Funds!
When will it STOP?
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WHERE ARE THE NEW REGULATIONS ON THESE CORRUPT MARKETS????
These crooks are making small fortunes driving each other out of business using SHORTING!
The TAXPAYER is paying the PRICE of Bailing Out Banks/Companies that are being short sold by other Banks/Hedge Funds!
WHEN IS THIS SCAM GOING TO STOP?
We think the government is taking over the Banks when in fact it is the BANKS TAKING OVER OUR GOVERNMENT!
I also seems to me to be the opposite of what I thought they would do. To me they would get more with carrots then such a big stick as they are currently using. I recommend they reward those that have been good and drop those that have shown poor behavior - just not renew them next time.
But instead this action was taken. It didn't surprise me as I am learning, sadly, that many people behave greedily and selfishly, especially those with corporate power. Odd that, in the end most will lose more than they gain.
These institutions do not need to be saved. The govt is giving them billions (our money) but check the fees these same instituitions are charging us.
These banks and financial companies should die a quick death.
And I do not buy the line we must give them billions if not trillions because of jobs. Other better run banks and instutions will fill the void quickly.
Our govt is not even changing the senior mgt. The most our govt has done is complain about some salaries and bonuses.
Does the govt really have our best interest at heart or campaign cash tfrom these institutions to be re-elected.
Everyone knows the 5.74% is a teaser introductory rate to lure new customers. The raise to 14.99% is still less than the 20+% most cards charge. I can not accept the argument that Citibank is singling out the older customers or that this high rates, fees, and other tricks are unique to Citibank when they are being used by most credit card companies on all their customers.
BTW: in CC speak, a person who pays on time in full every month is known as a 'deadbeat'. Most of their profits come from low income people up to their necks in debt, just paying interest and fees every month.
disclaimer: I have an Amex and debit, no credit cards, nor will I ever. I had some when I was younger, paid them off, and cut them up.
Tell them never to use any credit card unless it is life and death situation. A debit card from a local credit union should be enough.
People should stop using cards as cash to earn "points" . Why give those crooks access to your money? Look what are they doing with it. Just say no. Just use cash.
"Maybe if we banned credit cards and forced people to only spend what money they actually had we might not be in this credit crunch."
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