This is just a quick heads up to let you know that both Citi and Amex are revising their cardmember terms and increasing their credit card interest rates and fees. I wrote about this in more detail over at Credit Addict, but here’s the executive summary…
Purchase APR is going up to a minimum of 16.99%
Cash advance APR is going up to a minimum of 21.99%
Default APR is easier to trigger, and increasing to a minimum of 23.99%
Fees for foreign transactions are increasing (new 3% transaction fee)
You can opt out of the changes, but they’ll ultimately close your account
Cash advance APR is increasing to Prime + 17.99%
Late payment APR is increasing to Prime + 14.99%
Default APR is increasing to Prime + 23.99%
Foreign transaction fee is increasing to 2.7%
And here are the direct links to the articles, where I’ve transcribed the full text of the letters that I received:
Angie: That’s a good question. As far as I know, these changes apply to their “standard” terms, as outlined in their cardmember agreements, and the promotional offers supercede these rates. If you want to know for certain, I would suggest calling the card issuer.
Ouch, well at least this finally prompted me to set up a couple of alerts on my Citi card related to available credit. I only have $116 balance, so I doubt it will affect me, except in my FICO score of course.
The only comfort I am finding in this is that when reading the comments on your “credit addict” site it sounds like there are many getting royally screwed by the reductions in credit limits. For me it is just a minor inconvenience at this time.
@Angie, as with any other contract terms, your 0% bt promo rates remain the same; however, it can change if you do not abide by the terms of the promo (i.e. miss a payment etc).
@benp: 3% has been near standard for many banks, although the total was 3% with 1% being the V and MC transaction charge. What this really seems to mean is that you will not pay 4% total (3% card issuer, 1% V or MC).
@Danielle: no one is getting royally screwed, because if they don’t like the terms, they can close the accts and pay off at old rates; they can stop carrying balances, etc. since people can’t self-regulate themselves, creditors are forcing the issue.
for those with good credit that don’t carry balances, rates are dropping and limits are increasing and 0% bt offers are still plentiful. I continue to get 0% bt offers, even from citi. my limits have just been increased and my rates have just been decreased (my citi is under 10%).
So, have you seen the WSJ article referenced at fatwallet at http://www.fatwallet.com/forums/finance/879603
Chase is instituting $10 monthly fees starting January and increasing minimums due to 5% of balance from 1% with no option to opt out for some (all eventually?)with existing life of balance transfers in use.
@Patty: the $10/mo fee is for people having carried large balances for 2 or more years; although may not be able to opt out, they can terminate the card and pay under old terms or they can give up their promo rate. seems to me , if you have promo rate and can afford to pay off the card within the promo period, you can afford to pay an increased monthly minimum. it will definitely curb the 0% bt arbitrage game, though, if the monthly min is increased.
It is not clear to me that you have the option to opt out and pay on your existing terms. I believe they have the right to just change the terms and if you opt out the whole balance becomes due. At least, that is my understanding.
@steve, i think you are correct about opting out, which would cancel your promo rate. there are lots of new changes being announced, so it is really best to read the fine print and ask you creditor. If it isn’t showing in an addendum or on your credit statement, the policy isn’t targeting you. i also wouldn’t call, because I like to have things in writing. I’d send chase a secure email through your online acct.
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