Several weeks ago, my dad warned me to keep an eye out on my future credit card statements. He was referring to all the recent media coverage of the major credit card banks increasing card holder rates. I was aware that there had been some congressional hearings regarding this issue, but I had not really followed all the information on that matter in the news. Besides, I only have my one Citibank card and I’ve been with them for 18 years, and have good credit, so I know they won’t increase my rates.

Well, that’s how naive I was. Not only is my credit good, but at times when I carry a balance, I’ve always paid more than the minimum amount due and paid it on time.

As such, I did not think anything of the recent envelope that arrived in the mail from Citibank. Often, they send me promotions and checks and I just discard these items via my document shredder.

This particular mailer did catch my eye, more so than the others, because the large wiring on the outside stated: ‘Open immediately. Important changes to your policy enclosed.’                

The letter read as follows:
“Dear Mr. Giammalvo, to continue to provide our customers with access to credit, we have had to adjust out pricing. The terms of your account will be changing. These changes include an increase in the APR for purchases to 18.99% and will take effect December 29, 2009. As always, you have the right to opt out and pay down your balance under the current terms. If you opt out, you may use your account under the current terms until the end of your current membership year or the expiration date on your card, whichever is later. At that time, we will close your account.”

(Now here was the best part. They offered me a ‘solution’ to help ‘offset’ the increase in the APR)

“Charge 750.00 or more in purchases (less returns) and make your payment on time every month. Each month you do, you will receive a credit on your billing statement equal to 10% of your total interest charge on your purchase balance. ”

Now I thought, are they serious? Let’s get this straight, if I increase my spending by intentionally charging 750.00 or more I’ll get a 10% reduction in the interest charge on my account. However, that’s going to mean that the interest I’m paying is going to be greater due to the increased borrowing. I guess they think I can’t calculate simple math.

Another interesting item I noticed was that, if you default in payments they can increase the APR to 29.99%! Wow, uncle Vinnie the loan shark does not even charge  that much.
                       
Well, I decided to call customer service to voice my disapproval of how they had just decided to treat an 18 year, good paying, loyal customer. Besides, the squeaky wheel gets the grease right? I’m sure, with a little prodding on my part, they’ll reduce my rate back to where it was.

The customer representative then listened as I mentioned my credit and payment history and the fact that I had been a Citibank card holder since 1991. Guess what she said? She stated that, she understood my concerns, but that if I did not accept the latest terms, that I could select the ‘opt out’ option and keep my rate the same and that my account will close and we will part ways on the card’s expiration date of November 2011. Shocked at her reply, I took the opt out. I was dumbfounded.
It had actually now occurred to me that these big companies just don’t care. Credit history, length of time as customer. No one cares!

Now I started thinking, boy have I been the stupid one all these years. To think, I actually stayed with the same bank all that time. For what reason, brand loyalty? They’re certainly not being loyal to me. They don’t appreciate me as customer. They don’t care.

Now I thought, could I beet them at their own game? Is that possible? What if I sought out another bank, one that offers those one year, 0.0% APR introductory rates. After all, I’m always getting these offers in the mail. What the heck, then I can take all the time I need during that introductory period to pay off my account, interest free! Let me shaft them for a change! 

Well folks, that’s just what I did. I went on the Internet and browsed all the major credit card bank web sites. I found one with the 0.0% APR for 12 months for new charges and a one time fee of 3% for a balance transfer. And if I remember, maybe next year I’ll close that account and open up another at an introductory rate. Pay back is a bugger!               

p.s. Remember to monitor your business credit cards too and make sure they have not increased your rates.