Last week, I received a notice about my Citibank Mastercard. It seems that something around 13 percent wasn’t enough interest to charge me for any balances I carried on the card. I wasn’t worried because I don’t carry a balance. I’m pretty good about monitoring how I use my card and pay off the balance each month.
I got a letter last week saying that the rate would be raised to 29.99%! Why? Why now? Hadn’t I always been a good customer?
Easy questions to answer — a new federal law is about to kick in that would prevent credit card companies from doing this exact thing after the beginning of the year. So Citibank, and apparently others, are rushing to make their money grab before the regulatory curtain falls. Sure, we can “opt out” — and I’m making the call today to tell them exactly what they can do with their card and make a few polite suggestions about where they can put it — but a lot of people aren’t that lucky. They need their credit cards to make it through the hard times.
Citibank apparently has said they are just trying to make sure they can keep providing credit and make a profit for themselves, too. To quote the NPR reporter who wrote about this story, “Oh, cry me a river!”
So what are we supposed to do? Congress passed a law to protect us from this exact thing, to no avail. Now it’s in the process of creating a federal Consumer Financial Protection Agency whose goal would also be to keep financial companies from exploiting us. I wasn’t all that hopeful about it before, but with Citibank’s recent move, I’m even less convinced that a new agency would do us any good.
One of my favorite old-fashioned legal words from law school was “usury.” I thought it conjured up images of those old time money lenders who wore the long robes and kept their gold coins in their pockets at all times. It’s not such a fun word when lending institutions invoke it to keep themselves afloat when the rest of us are struggling.
Supposedly, Congress says it will step in to keep this from happening even though the law doesn’t go into effect for several more weeks. I’m not holding my breath. In the meantime, I’m canceling my Citibank card to send them a message — I can manage my own money without the “convenience” of having your credit card in my wallet, thank you very much. It may take me a while, but I bet I can find another bank who will treat me with a bit more respect and who knows that I’m not naive enough to go along with 30 percent interest EVER.
If they want to “play rough,” as some reports have indicated, maybe it’s time for us to do the same. The choices might be meager, but there have to be alternatives.