Comment of the Day
December 16, 2008 | Uncategorized | Comments (4)Maybe the Payday Pundit can’t criticize banks and card companies from reassessing their risks and changing terms, but I can.
There is no reason to raise the cost of borrowing to someone who has been a good customer for many years. The banks are exacerbating the economic situation and showing just how ruthless they really are. They should be penalized for what they are doing to the public. I didn’t ask for all those credit line increases and I didn’t complain about the 1/2 percent rate increases. Increasing 7-10 percent is outright criminal, especially when rates are still falling.
This ideology is the true weakness in our economy. This kind of greed shows a complete disregard for customers is not good business.
I hope the banks that did this (CITIBANK) never recover the business they are chasing away.
Comments»
It isn’t “criminal” unless they are breaking a law or agreement. A business has – or should have – a right to set it’s own prices. If you don’t want to borrow money at their rates, go somewhere else. This is the same mentality which people use to criticize payday lending.
Ok, Jon, they aren’t breaking any laws. Lack of regulation prohibiting it doesn’t make it right. People who are unaffected by ‘unfortunate events’ tend to blow it off as other people’s problems. I see you didn’t borrow money at 9% interest and now have to pay 19% interest on it. Oh, and your rate went up despite your perfect payment history and having been an exemplary customer.
Otherwise, you’d be just as angry as everyone else. Good for you. I guess you won’t care all the way until you lose even more of your portfolio because ’sucker’ consumers aren’t buying on credit anymore (lest we forget that 2/3 of all U.S. economic activity is consumer driven).
Your comparison to the payday loan industry isn’t valid. Payday loans don’t increase the rate of interest BEFORE they are repaid.
J,
I wasn’t thinking of that scenario but rather simply of borrowing money on the card at the new rate. I imagine Citibank has something in their terms and conditions that allows them to raise the rate on outstanding balances, even if you haven’t had late payments.
I think reasonable regulation would require them to make that very clear to customers who sign up for the card – and not just bury it in fine print. I don’t know if that is in place or not.
In any case perhaps you can transfer your balance to another credit card company offering lower rates. Wish you the best with it.
Jon,
Thanks. I am lucky enough to be carrying a small balance, so I’m not getting hurt as much as others. It’s the principle of the matter that gets me.
The banks give out booklets of fine print that they know no one will read (I know I didn’t). Disclosure is important, but I don’t think anyone saw a huge rate increase coming as a result of the financial crisis (also unforseen to most). I don’t think it’s right that the banks are trying to make consumers pay for their losses. We’re paying for it twice if you consider the TARP money, too, so it’s really unfair. Recipients of taxpayer money should be prohibited from squeezing their customers like that.
I am generally unhappy about the way the government is handing out money for banks to lend and the banks respond by raising rates, lowering credit lines, and still restricting lending. The banks that aren’t acting in the best interests of the public should be barred from public money and allowed to go under NO MATTER HOW BIG THEY ARE (CITIBANK!!!)
Anyway, Jon, I didn’t mean to ’snap’ at you. It’s not your fault that I am furious with Citibank. LOL