Question
I know most of us give these change notices a cursory glance, but with all the press about the Fed looking at risk reserves for lenders, i've been reading a little more detail.
I was pretty shocked, to see the changes in my AA World Mastercard T&C's - "Your annual rate for purchases is the U.S. Prime Rate plus 14.99%, but such purchase rate will never be lower than 19.99%". Naturally, this is quite a jump from my 10% rate, i've got new credit (just over two years), but no negatives on my credit report. As an FYI, there are a number of versions of the changes out there, so this may not apply to all.
I ran customer service, and i've apparently got them running around on Labor Day, as their training told them to tell customers that they could request a lower rate, after the change went into effect. Contradictory to the T&C's.
Anyway, i'll update when I find out more...just a friendly FlyerTalker FYI...
Answer
My Citi® Platinum Select® Card is also being raised. I received the notice in change of terms with my August billing statement. I'm being raised to Prime + 4.99% (Currently 9.74% as of Aug 1, 2002), and my min payment is being calucuated different if APR exceeds 19.99%. They just add an additional $5 to the payment now.
I have one of two options, refuse the terms and continue to use my card until it expires, or accept these ridiculous terms. I have refused them.
Citi is doing this across the board to "restructure there business portfolio" according to a manager. Nothing on a personal level.
Answer
Originally posted by Gekko:
I know most of us give these change notices a cursory glance, but with all the press about the Fed looking at risk reserves for lenders, i've been reading a little more detail.
I was pretty shocked, to see the changes in my AA World Mastercard T&C's - "Your annual rate for purchases is the U.S. Prime Rate plus 14.99%, but such purchase rate will never be lower than 19.99%". Naturally, this is quite a jump from my 10% rate, i've got new credit (just over two years), but no negatives on my credit report. As an FYI, there are a number of versions of the changes out there, so this may not apply to all.
I ran customer service, and i've apparently got them running around on Labor Day, as their training told them to tell customers that they could request a lower rate, after the change went into effect. Contradictory to the T&C's.
Anyway, i'll update when I find out more...just a friendly FlyerTalker FYI...
One thing also to watch is if you take a cash advance on your Citibank AAdvantage Gold MasterCard. I sent of friend in need $400 using Western Union's Callcash service. In addition to the onerous charges Western Union charged, Citibank charges interest for that at a higher interest rate from the date it is posted, when compared to regular purchases, since they consider it a cash advance. I was carrying a balance at the same time, because of some other large purchases I made (like a new dining room set), but was paying off the balance quick. One thing to watch is how they proportion their interest charges for purchases and cash advances. It seems when you make a payment, the payment goes mostly against your purchases, and then if anything is left over, then your payment is applied against cash advances. No FIFO (first in, first out) accounting here. The only way for me to totally get rid of paying high finance charges on the cash advance, is to pay my whole balance in full, and then some. This I eventually did. Anyway, I just had to vent my frustration here and warn others about this.
Answer
Originally posted by burgerwars:
One thing to watch is how they proportion their interest charges for purchases and cash advances. It seems when you make a payment, the payment goes mostly against your purchases, and then if anything is left over, then your payment is applied against cash advances. No FIFO (first in, first out) accounting here. The only way for me to totally get rid of paying high finance charges on the cash advance, is to pay my whole balance in full, and then some. This I eventually did. Anyway, I just had to vent my frustration here and warn others about this.
Some banks will allow you to to specify how your payment is applied. I'm not sure what Citibank's policy is. That is, with some banks, as long as you meet the minimum payment amount for purchases, you can designate the remainder be applied to the cash advance balance.
With promotional balance transfer offers, there's often a clause which specifically prohibits you from doing so - that is, you must pay off the promotional balance entirely before any payment is applied to higher rate balances.
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One very nice thing about Citibank (unlike Amex!) is that you can tell them to automatically deduct your payment from your checking account at the end of the month. THus no onerous finance charges at all.
Now if only they would provide a direct link to QUicken.
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Fly first class now or your children will
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Originally posted by freakflyer:
Now if only they would provide a direct link to QUicken.
They do. Quicken happily downloads all my transactions automatically.
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Originally posted by Freakflyer: "One very nice thing about Citibank (unlike Amex!) is that you can tell them to automatically deduct
your payment from your checking account at the end of the month. THus no onerous finance charges at all."
You can pay the Amex bill online or by phone and they deduct it directly from the checking account.
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Also, for AmEx charge cards you can pay your previous month's balance up to the day of your next statement closing and not get hit with any finance charges or fees.
No Citibank cards have that kind of grace period. But, regardless of whether you use automatic payment at Citibank or not, you won't get charged any finance charges as long as you pay off your bill in full each month in the 20 or 25 day grace period after your statement date. That's always been plenty of time for me to electronically send in a payment manually.
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Originally posted by Doppy:
Also, for AmEx charge cards you can pay your previous month's balance up to the day of your next statement closing and not get hit with any finance charges or fees.
No Citibank cards have that kind of grace period.
Except of course for Citibank Diners Club, which gives you until the last day of the second statement closing to pay your balance in full without a finance charge or fee.