When people can’t afford to pay their new, much higher interest rates… will the government bail them out too?
My dear friend, Jeff, has been a Citibank Credit Card customer since 1997. Never had any trouble with his Platinum card, not one missed payment, not one over-limit charge. So how do they thank him for his 11 years of patronage, and the $326 Billion bailout that his tax dollars helped to fund? By doubling his interest rate.
I know Jeff is not the only one. This is wrong no matter who the customer is. I understand trying to mitigate your risk and re-evaluating customers who have had problems in the past…but when you are doubling the rate on someone with around 25% utilization who has never been late and never been any trouble…well its a poor business decision to say the least.
Americans are getting squeezed from all sides right now, and it is our money bailing these companies out. You don’t thank your customers by being the next on the list to stick it to them. You thank them by standing by them just like the federal government is standing by you. But no, one stupid business decision leads to another…and instead of trying to keep the loyal good customers you have, you screw them and everyone else because you made a mess.
Oh well. The Citicard is the oldest credit card Jeff has, and thus his credit score will likely drop a few points when he closes it. But he will opt-out of this ridiculous rate increase and close his card at the end of the term. Citi may be too big to value Jeff's business, but he's not loyal. The companies that survive this mess will be the ones who make good decisions at a time of adversity and understand it is easier to keep a customer than find a new one. As for me, I hit the sweet spot for Citibank...often carrying a balance but not maxed out…always paying on time but still paying interest…but that’s going to change. They will not make another dollar of profit off of my CC. As for Jeff, he’ll pay a higher interest rate to someone else before Citi rewards his patronage and thank him for his tax dollars by doubling his rate.
So I want to ask again: When people can’t afford to pay their new, much higher interest rates, will the government bail them out too?
Two-three weeks ago they were talking about laying off 52,000 people, and then we find out last weekend they are being bailed out with our tax dollars. Federal regulators approved a radical plan to stabilize Citigroup in an arrangement in which the government could soak up billions of dollars in losses at the struggling bank, the government announced late Sunday night.
I know Jeff is not the only one. This is wrong no matter who the customer is. I understand trying to mitigate your risk and re-evaluating customers who have had problems in the past…but when you are doubling the rate on someone with around 25% utilization who has never been late and never been any trouble…well its a poor business decision to say the least.
Americans are getting squeezed from all sides right now, and it is our money bailing these companies out. You don’t thank your customers by being the next on the list to stick it to them. You thank them by standing by them just like the federal government is standing by you. But no, one stupid business decision leads to another…and instead of trying to keep the loyal good customers you have, you screw them and everyone else because you made a mess.
Oh well. The Citicard is the oldest credit card Jeff has, and thus his credit score will likely drop a few points when he closes it. But he will opt-out of this ridiculous rate increase and close his card at the end of the term. Citi may be too big to value Jeff's business, but he's not loyal. The companies that survive this mess will be the ones who make good decisions at a time of adversity and understand it is easier to keep a customer than find a new one. As for me, I hit the sweet spot for Citibank...often carrying a balance but not maxed out…always paying on time but still paying interest…but that’s going to change. They will not make another dollar of profit off of my CC. As for Jeff, he’ll pay a higher interest rate to someone else before Citi rewards his patronage and thank him for his tax dollars by doubling his rate.
So I want to ask again: When people can’t afford to pay their new, much higher interest rates, will the government bail them out too?
Two-three weeks ago they were talking about laying off 52,000 people, and then we find out last weekend they are being bailed out with our tax dollars. Federal regulators approved a radical plan to stabilize Citigroup in an arrangement in which the government could soak up billions of dollars in losses at the struggling bank, the government announced late Sunday night.
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