Oh, the tumult that's been going on in the credit-card world the last ten months or so! Oh, the angst displayed by dubious cardholders as their precious credit limits have been slashed, their APRs inflated to orbit, and new annual fees instigated!
Yeah. Pardon me while I fire up another batch of buttered popcorn and enjoy the show.
I mean, the entertainment value here — all the verbal flailings and gnashing of teeth of revolving debtors, so loudly pronouncing their financial misfortunes minute-by-minute on TV and the 'net — is sky-high. (Not unlike those new APRs.)
Maybe you've noticed, too: 'Net message boards and chat rooms are absolutely ablaze with debtor diatribes lately.
"Citibank just raised my rate to 29.99 percent FOR NO REASON!" the postings typically go. "I pay all my bills on time! This is so unfair! It should be illegal!"
And so on.
Well, color me fulfilled. Why? Because I can now count myself amongst the great unwashed masses whom Citibank has deemed worthy of a 20+ percent APR on our plastic. (They rate-bumped me a year ago, too.)
Our "20 percenter" letter (PDF page 1 and PDF page 2) arrived just a couple of days ago.
Being a dedicated late-night reader of financial sites and blogs, I'd be fibbing if I said I hadn't been expecting the letter for a while.
It was anticlimactic, really. I knew it wouldn't matter.
Lisa and I haven't carried a balance (other than for card arbitrage purposes) since paying off our cards in 2004. So this APR increase, and all the other rate increases which accompany it (see PDF page 2 above), are of zero consequence to us. This particular Citi card is of the cash-back variety, which means we use it (and a similar card from Chase) for practically every purchase we can, and we pay off all balances in full each month.
This is one of the nice things about being almost-debt-free: Banks like Citi can jack your APR to 40 percent. Heck — make it 50 percent.
When you don't carry a balance, you don't care about the rate.
It's a non-event. A yawner.
You don't carry a balance. That rate means nothing. In fact, you're a predator of sorts.
It's a good place to be.
On the other hand, if you're Liz Jones, then you've got problems. Money school is in session, and the teacher just called you out.
Again I'd like to point out: The private-sector deleveraging that's going on is pretty stout. I'm happy to see it. Heck, I'm almost giddy.
With unemployment in double digits and credit lines disappearing faster than honey buns in Michael Moore's pantry, your neighborhood Debt-Laden Consumer is likely in a world o' hurt.
For a lot of folks, even those who aren't strictly paycheck to paycheck, life is dishing out a mighty painful lesson:
Debt is not your friend ... and neither is the bank who sold it to you.
For those readers who'd like to venture away from Citibank for a moment and scan the bigger picture, I offer the following, courtesy of the New York Times:
NY Times: Banks Squeeze Customers Ahead of New Rules
Enjoy ... and be on the lookout for your letter!
Labels: Credit Cards
