Complaint Review: CitiBank - The Lakes Nevada

Citibank not only has the right, but the obligation to raise interest rates on consumers that are frequently late on their non-citibank accounts. They also have the right and obligation to call a balance due when a consumer defaults on other bills. This is called a universal default and is rarely used. Doing these things keeps interest rates down for those of that pay our bills on time. If you are a poor risk, you should pay higher interest. I work for a collection agency and citibank is my client. They rarely exercise these options.

In response to the original concern.... when your interest rate is increased to prime + 23.99 or currently 27.99%, and the reason indicated is default off us, it means that your account with another creditor is past due for more than 60 days and has a balance of more than $100.If you feel something has been been reported in error citibank will adjust the rate for four months and give you the opportunity to dispute the error. Citibank (as due most finacial institutions) will periodically pull a copy of your credit report to determine risk. The same practice occurs when you apply for the account. No one seems to complain when the company LOWERS you interest rate because of this or offers a credit line increase. Your credit report is the end all, be all history of your life. It is the Alpha and the Omega, there is no escaping it.If anyone should be looking at it, it is you. Creditors rely on this information. They hire very expensive economists and strategic analysts to analyze data and determine a statistical conclusions as to what constitues high risk. Sure the 27.99% is a rip off, it's outragous, it is mean to be. Some have dubbed the rate the citibank death penelty. Keep in mind you are borrowing this money, it is not yours. When you borrow as with anything you must accept the terms of the lender, if you do not, then don't use their card. Rationally speaking the bank is hoping you will close your account, and transfer the balance. Banks do not want to lend money to someone when they don't think they are going to get paid back.Would you? The default rate achieves it's purpose: either the cardmember transfers the balance and the bank is paid, or the cardmember is forced to pay the higher rate, and the bank recieves at least their initial investment back before the debtor decides to claim bankruptcy and wipe the debt clean. It may sound rather harsh, but that is exactly why business is not personal.

Since Congress changed the laws, my credit cards have deluged me with changes in terms. Citibank has been one of the better ones, but some send changes almost every month! They make a deal with you--loan you money at a specific rate and term. But then they change the terms giving the option of closing your account or continuing with new potential rates and penalties. Meghan - Albuquerque's rebuttal above demonstrates the paternalistic judgmental attitude--it's all about entitlement, deserving, "blemishes". Deserving good rates or deserving penalties and punishments. Creditors aren't parents and we're not their children--this is all window dressing to make the public think there's some sort of moral dimension to messing around with the rates after making the loan! I just got a new change of terms from Citibank. Please note Meghan: Now if you are late ONE TIME your balance is subject to the penalty rate AND IT WILL CONTINUE AT THAT RATE UNTIL PAID OFF, EVEN IF YOU MAKE PAYMENTS ON TIME FOR 6 MONTHS! Only new purchases, after the penalty period will be at the lower rate! Just one late payment and your entire balance will go up to 28% until paid off! I've been with Citibank for 20 years but will be closing that account. Has everyone noticed that Congress allowed credit card companies to do away with the 1-3 day "grace period" for due dates, but many companies change the due date every month? There's no true justification for having a different due date, just old actuarial/accounting tradition from when interest was calculated by hand--a decent set of laws would recognize this (and allow for weekends in the customer's favor). Because of this, I cannot set up automatic payments because several months out of the year the due dates are significantly earlier. Many companies no longer let you "pay in advance" so a too-early payment is credited on the last months' bill and then you're screwed for not making a payment when you thought you did. I'm gradually consolidating and moving my debt to cards with better terms. But Citibank had been one of the best, now it's as bad as First USA was!

In November I misplaced my Citi statement and forgot to pay it, $167. I got my statement in December and saw that my minimum payment was $343, there was a $35 late fee and my interest had gone from a promtional rate of 3% to the default of 29%. On an $8000 balance I was screwed. I E-mailed CitiBank and told them what happened and ask if my rate could possibly be returned to the promotional rate. Hey, I had nothing to lose! With in hours I got an E-mail back telling me that as a courtesy they would return my rate to 3% and it would be reflected on my January statement. Was I ever relieved. At 29% I never could have gotten them paid off. I got my January statement and as promised the rate had been returned to 3%. But to my total surprise the late fee had been refunded AND the excess interest from the higher rate for 30 days had been refunded. Four years ago when I was rebuilding my credit CitiBank was the only credit card company willing to give me a real credit card ($3500 limit)with no security deposit or annual fee. Since rebuilding my credit I pay ALL my bills on time and my Citi card now has a $12000 limit. Above all READ those papers with the little tiny writing on them that come with your statements. Credit Card companies count on consumers not reading those things.

If Citibank is so worried about how I am paying my other creditors, then they should not have issued credit in the first place. How is jacking up the interest rate to an unbearable amount going to help matters. For most people, this would make it more likely that they would not be able to pay.

Nearly all credit card contracts allow the company to change (i.e. raise) your rate at any time. They can do it for whatever reason they want, or for no reason. There is no such thing as a "fixed" rate! It's a huge half-truth they tell. The only thing "fixed rate" means is that it is not tied to the "prime rate." If they went out and jacked up the APR on everyone, a lot of customers would vote with their feet like Chris did. So they have to be selective. Who is going to have to stay and pay the higher rate? Someone with late payments on their credit report. These consumers are trapped because they won't be able to qualify for better terms from another bank. This is the reason that certain consumers' rates are jacked up, the stuff about these consumers being a higher risk is just a pleasant explanation. Actually, someone with occasional late pays is a lower risk -- of leaving for another bank. These card contracts are, like every other consumer contract, very one-sided. For example they will detail the varous fees and the circumstances under which they will be charged, then add this clause: "Other fees may apply." In other words, "We reserve the right to charge you any fee we want at any time, even those fees we haven't even thought up yet." They could have just said that and not wasted all that ink detailing the fees that they have thought up. The only defense really is to be ready to pay off the card and run away. Credit cards aren't suitable for borrowing money for more than a few months.

Nearly all credit card contracts allow the company to change (i.e. raise) your rate at any time. They can do it for whatever reason they want, or for no reason. There is no such thing as a "fixed" rate! It's a huge half-truth they tell. The only thing "fixed rate" means is that it is not tied to the "prime rate." If they went out and jacked up the APR on everyone, a lot of customers would vote with their feet like Chris did. So they have to be selective. Who is going to have to stay and pay the higher rate? Someone with late payments on their credit report. These consumers are trapped because they won't be able to qualify for better terms from another bank. This is the reason that certain consumers' rates are jacked up, the stuff about these consumers being a higher risk is just a pleasant explanation. Actually, someone with occasional late pays is a lower risk -- of leaving for another bank. These card contracts are, like every other consumer contract, very one-sided. For example they will detail the varous fees and the circumstances under which they will be charged, then add this clause: "Other fees may apply." In other words, "We reserve the right to charge you any fee we want at any time, even those fees we haven't even thought up yet." They could have just said that and not wasted all that ink detailing the fees that they have thought up. The only defense really is to be ready to pay off the card and run away. Credit cards aren't suitable for borrowing money for more than a few months.

Nearly all credit card contracts allow the company to change (i.e. raise) your rate at any time. They can do it for whatever reason they want, or for no reason. There is no such thing as a "fixed" rate! It's a huge half-truth they tell. The only thing "fixed rate" means is that it is not tied to the "prime rate." If they went out and jacked up the APR on everyone, a lot of customers would vote with their feet like Chris did. So they have to be selective. Who is going to have to stay and pay the higher rate? Someone with late payments on their credit report. These consumers are trapped because they won't be able to qualify for better terms from another bank. This is the reason that certain consumers' rates are jacked up, the stuff about these consumers being a higher risk is just a pleasant explanation. Actually, someone with occasional late pays is a lower risk -- of leaving for another bank. These card contracts are, like every other consumer contract, very one-sided. For example they will detail the varous fees and the circumstances under which they will be charged, then add this clause: "Other fees may apply." In other words, "We reserve the right to charge you any fee we want at any time, even those fees we haven't even thought up yet." They could have just said that and not wasted all that ink detailing the fees that they have thought up. The only defense really is to be ready to pay off the card and run away. Credit cards aren't suitable for borrowing money for more than a few months.

Nearly all credit card contracts allow the company to change (i.e. raise) your rate at any time. They can do it for whatever reason they want, or for no reason. There is no such thing as a "fixed" rate! It's a huge half-truth they tell. The only thing "fixed rate" means is that it is not tied to the "prime rate." If they went out and jacked up the APR on everyone, a lot of customers would vote with their feet like Chris did. So they have to be selective. Who is going to have to stay and pay the higher rate? Someone with late payments on their credit report. These consumers are trapped because they won't be able to qualify for better terms from another bank. This is the reason that certain consumers' rates are jacked up, the stuff about these consumers being a higher risk is just a pleasant explanation. Actually, someone with occasional late pays is a lower risk -- of leaving for another bank. These card contracts are, like every other consumer contract, very one-sided. For example they will detail the varous fees and the circumstances under which they will be charged, then add this clause: "Other fees may apply." In other words, "We reserve the right to charge you any fee we want at any time, even those fees we haven't even thought up yet." They could have just said that and not wasted all that ink detailing the fees that they have thought up. The only defense really is to be ready to pay off the card and run away. Credit cards aren't suitable for borrowing money for more than a few months.

Other businesses don't have free, unlimited access to consumer credit histories like banks and credit companies do-and yes Citibank and the rest snoop on a regular basis at the cost to the consumer. Citibank doesn't put itself under the same microscope for consumers to see how it deals with other companies. In fact, Citibank does everything in their power to hide how they do business and any negative outcomes they create, yet the expectations on consumers from citibank is for us to "mind our own business". Just because there is fine writing doesn't mean everything contained is legal or ethical-regardless of someone reading or not reading it. The responsibility is on the company to conduct itself in an Ethical and Legal manner-not to skate by.

As an ex-employee of citigroup, I don't have the most stellar things to say about it, but people have to take more responsibility for their credit and credit reports. As I used to work in the collections department, this report is a common complaint. Unfortunately, people don't read the disclosures that come with their credit cards. Any credit card will try to minimize risk, and one way to do that is periodic checking of members' credit bureau reports. Past and current payment habits are the best indication of how someone will pay. Any financial institution abides by this -- especially in unsecured consumer credit. An APR is raised to a default APR when a consumer defaults in some way on a loan or account. It doesn't have to be on the card in question. So what if you pay your Citibank bill on time every month? If you're paying late somewhere else, you're a financial risk to the company. You deserve the default pricing because with less than perfect credit *in general* you aren't entitled to the same great APRs that people without blemish get. Quite honestly, if you pay your bills on time and let your creditors know if you're going to have trouble paying something, you can retain your 15.9%. And if you do mess up, you know the rules... six months of ontime payments and if you do that, your rate will go down. But you can't just pay one company and not others. Companies have a vested interest in how you pay your bills. They have a right to know, and if you read your card's accompanying documents, you would already know this.