Card Companies are expecting 100 Billion on defaults in 2009.. Get ready for the credit card crisis.

zeromydebtnow.com

Bitter medicine. It's a blessing in disguise. The country needs to be weaned from its credit card addiction. Expect to see more of this as we learn--the hard way--to live within our means.

Unfortunately Christmas has become a big shopping binge and lost much of its true meaning. So if consumers must consume less, I can't say that's a bad thing.

DD: I gotta say, I agree with you Terry. Celebrating Christmas or any holiday shouldn't put you in debt. I'm writing about layaway plans and how that might be a more sane approach to the holidays this year.

It's the Martin OweMalley affect!
Raise rates to raise revunues
when in reality raising the rates will lower revunue in the long run as smart shoppers
especially those who read your column take their business elsewhere!
And I was a history major!
:)
Jay

DD: You are a wise man, Jay.

I've got this great idea, let's all start a business, mange it incredibly poorly and make really stupid, risky investments, and then fix the problem by alienating our customer base and charging them more for our services!

DD: Evan, don't get me started. I'm right there with you.

2-3%? I got my letter today for my Diamond Preferred, previously 5.99%. In March, unless I "opt out" my rate goes to 24.99% at current market conditions. I agree with the article. How is my closing my account (which I did immediately after a very brief and one-sided phone call) going to make Citi any money. I know that this absolves them of 11,000 dollars in risk, but seriously, how is this going to help the corporation in the long run?

DD: Bill, I wish I had an answer for you. The 2-3 percent was an average so I'm betting there are many out there like you seeing bigger increases. The worst part is that for their bad judgment, Citi will get a bailout while their cardholders get stuck with higher interest rates. That stinks.

We received one of these white envelopes in the mail today. It informed us that our present 5.9 will go up to 24.99. That is HUGE for us. I feel for everyone out there as I don't anticipate it getting any better any time soon.

Melody, that's way more than just a few percentage points ... I wonder if anyone has had any luck calling Citi and trying to negotiate. --- lfk

IFK: My attempts to negotiate were snubbed,hard, being told the the increases were"Across the board" and "affecting all Cii customers". There was no room fo negotiation whatsoever. They wouldn't even let me finish my sentences.

DD: Bill, I'd start shopping around for a new card.

I also had a 5.9 APR and they raised mine to 24.9. Between this and their online savings accounts that only keep a rate if there is direct deposit, no wonder they are failing. It's not just the toxic investments because I am a young professional just getting out into the world and now I know to avoid them. They are destroying their customer base because I am paying the card off and never doing business with them again.

DD: I don't blame you, Michael. I'd feel betrayed by them as a loyal customer, too.

Just got my letter today - I think my beginning APR was 8.99% and they are raising it to 16.99% as of Dec 3rd. How nice they waiting until after Black Friday. I rarely use this card and it has a 0 balance. Here's my question: Are they basing these increases on credit score? On how often you use your card? I'm curious. By boss has a CitiCard and uses it for EVERYTHING - average balance is $5-7K per month, BUT she pays it off each month. Now, I'm just betting she see's a very small increase in her APR, or none at all. And yes, I will be closing this account also!

I actually closed my account 2 weeks ago after they were in the news for mass lay offs and asking for help. I still received a APR increase letter on Saturday saying they were increasing me from 8.99 to 24.99%. That is alot more than 2 to 3% that they are saying is the average, and based off of other blogs, it looks like they are doing this to everyone regardless of credit score or history. I am just glad I had already canceled the card so I don't even have to deal with calling them now to do so. I don't see how alienating your consumer base is going to make them money. After this, I can guarantee you that I will never do business with CITI again.

Tanya, glad you got out while you could! --- lfk

Citi Gets 20 Billion Dollar Bailout - Nov 24 08, Citigroup Bailout: Plan Injects $20 BN Capital, Guarantees $306 Bn in Toxic Assets.

The Bailout includes my tax dollars. I consider my debt is paid off.

So, [edited] OFF Citi...

Use the context clues, readers ... --- lfk

Ok, with Citi since 2003. Never paid late. 6.99% fixed rate. $8.73 balance. Paid it off this month. Got the letter. Changing my rate to 14.99% VARIABLE! WTF? I called them and negotiated to a 11.99% variable (a joke considering I was at the low fixed rate). The reason I didn't opt out because I was worried about what it would do to my fico score (705) and worried about what kind of credit card I would get if I applied in this market. *Flipping a bird at Citi*

I have been recommending to many friends & associates that if they are in the market for a major credit card NOT to get it from a major bank. There are alternatives: they are known as credit unions! I obtain a VISA card from one of the nicest credit unions in the US...Pentagon Federal Credit Union. They started me out at $5000 and now the limit is $50,000! The interest rate is less than 10% and I have never had any problems dealing with Pentagon Federal.