Citibank Wants More of Your Money
I came home tonight to find three envelopes from Citibank in the mail. Two were identical credit card offers. The third envelope contained a brief notice tucked inside a harmless-looking Privacy Disclosure. What did it say? Citibank has decided to change the terms of my credit card contract. From now on, they'll continue to charge a 3% transaction fee on balance transfers, but they're removing the maximum fee cap. In other words, if I transfer a balance of $10,000, they'll charge me $300, and so on. So much for those voluntary "concessions" the banks made during the Senate hearings earlier in the month.
Why the hiked fee? Surely Citibank can't claim with a straight face that it would cost them $300 to simply send a payment to another lender. Heck, I can pay all of my bills online -- credit cards included -- for free. So, what's the deal? Well, maybe they've magically discovered that balance transfers are associated with "risk" increases; after all, you are transferring a balance rather than paying it. But wait, isn't that why transferred balances are subject to substantially higher APRs? Also, isn't it true that Citibank wants that business and that risk, because they derive the bulk of their revenue off of people carrying over substantial balances?
Uh oh, we're out of justifications. Here's an explanation instead: naked greed. I encourage everyone reading this who holds a Citibank card to cancel it and go elsewhere for your credit.
It doesn't surprise me. As I have mentioned in previous comments, I have gone the full 10 rounds with Citibank. "Naked Greed" really is a good term. They have no mercy on those they ensare in their trap, using free choice as their defense. They have to use predatory methods, they wouldn't survive otherwise. What people don't see is that this bank as well as the other leading credit card companies are really legalized loan sharks, and instead of breaking your leg, they simply seek to enslave you to serve them for life if possible. That is how they make money.
Take a much closer look at your agreement with them. You've only seen the tip of the icerberg.
Jim Anderson
The Truth About Credit
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March 23, 2007 12:55 PM | Reply | Permalink
The smart money is on getting rid of your credit cards. Bluntly spoken, why pay for an item twice? It took me several thousands of dollars worth of payments to realize that a debit card is a simple and straightforward way to go. I finally paid off all my wallet leeches, but it cost me. Get rid of your cards, and spend the money you'll be saving on not making interest payments on a shredder for your junk mail. Also, there's supposed to be some sort of credit locking service where they 'freeze' your credit for you, so no accounts can be opened in your name without your direct approval, I'm not sure of the details, but there's something they're trying to do for everybody...
March 25, 2007 6:25 PM | Reply | Permalink