I have had a Citibank card for 20 years. I carry just under $15,000 in debt.
Recently I received notice from them that the terms of my account are changing. Included is an increase in the variable to 18.99% from 14.240%. They have given me the right to opt out and pay down my balance on my current terms.
If I do opt out, I can use my account under the current terms until the end of my current membership year and/or expiry on my card, in this case 11/30/10. On the other hand, if I accept the increase to 18.99% I can offset by making on time payments between 1/10 and 6/10 (I’m already on time) and at least one purchase each month on my card. (Obligating me to make one purchase a month) then starting 7/10 my APR goes down a whopping 1% to 17.99%. I’m already carrying enough debt as it is and I have not made purchases with this card for at least two years. I don’t know if I can pay off $15,000 by 11/10.
Additionally, its quite galling to have CitiCards obligate me to spend more money or pay off a large amount of money when they have yet to repay the government TARP funds they accepted.
I was wondering if I have any kind of legal or regulatory appeal here or, are my options to either pay off the $15,000 in 11 months or pay more per month?
Got to love them for being creative. Basically they screwed up and almost took the bank down and now they are sticking it to the customers with these profit making term changes.
Trying to chase them away with some regulatory compliance issue is going to be a huge waste of time in my opinion. They have better lawyers than you do.
I think the best move would be to move your debt from Citibank to Lending Club and not allow Citibank to make any profit off of you while at the same time keeping your card at a $0 balance, pay it off at a much lower fixed interest rate, and get a credit bump to boot.
I think that approach will resolve your issue with the least waste of life energy and most personal satisfaction for you.