FYI the Citi card thing with the gas stations started earlier last week.

one big bank down... how many to go?

B of A has 10% defaults, cu off your credit lines people they will be toast!

Next is TD, and Duetche bank, then JP morgan!

Goldman will be extremely hard to take down. They have so much talent its pathetic. everyone there is super smart, well paid, very driven, and make amazing picks ( I have two extremely smart friends up there).

Not bad guys! Keep the war up. remember. Credit unions are your friend!

I cut myself loose from these clowns at citi earlier this year...despite an excellent rating and track record, they began to start "losing" my credit card payment checks or claiming I had made them later than I actually did, etc., in order to nickle-and-dime me on late fees and hike my rates.

When you start treating long-term responsible customers like garbage just to squeeze out a few extra percentile points or pennies on a buck, you are killing the goose that lays golden eggs. Lot of that going round these days with other banks and cards, from what I hear.

What's going to happen when all the responsible, finacially-aware people have abandoned ship and all these banks are left with are the lugheads who are too stupid to read and understand the fine print? The most grotesque destruction of long-term vision in favor of a quick buck for the current quarter is underway seemingly across the financial world...ugly chickens will come home to roost on in the guano-spattered, lean-to henhouse quite soon.

Originally posted by silent thunder
I cut myself loose from these clowns at citi earlier this year...despite an excellent rating and track record, they began to start "losing" my credit card payment checks or claiming I had made them later than I actually did, etc., in order to nickle-and-dime me on late fees and hike my rates.

Lol they did the same thing to me, until I started adding delivery confirmation to my payments, then they stopped. I dropped them shortly after. Stupid move on their part.

Originally posted by Mainer

Originally posted by silent thunder
I cut myself loose from these clowns at citi earlier this year...despite an excellent rating and track record, they began to start "losing" my credit card payment checks or claiming I had made them later than I actually did, etc., in order to nickle-and-dime me on late fees and hike my rates.

Lol they did the same thing to me, until I started adding delivery confirmation to my payments, then they stopped. I dropped them shortly after. Stupid move on their part.

National city did the same to me and you see where they are now. Those bastards ruined my credit and had collectors hounding me for years until I won it in court.

I caught wind of this a few days ago. I found it extremely amusing that the new apr is 29.99 and the default rate is 29.99. Pay card on time? Ok, 29.99. Don't pay it? Fine, 29.99. There's no incentive to pay the card on time and every incentive to max it and default it, provided you could care less about the credit score. And before I get flamed, I came to the above conclusion from a business stand point and not a moral one (two different things, though moral hazard was breached when they can borrow from the fed at 0% and charge me up to 30% to borrow it back).

One possibility. They need cash and don't care how they get it. Also there is the possibilty of booking future interest payments as income today. I know it sounds weird, but it happens (look at the mortgage mess to see that one). One also has to think about the 800 billion in shadow assets these guys have (SIVs).

Another possibility is CITI is heavily vested by the US Gov. What if the gov wants an orderly unwind with the least amount of people to cover through a possibly insolvent FDIC? Drive away the customer base and unwind with the least amount of damage. I always thought the Bank O America was going to be the sacrificial lamb, but now thinking it could be CITI.

The treasury and fed still haven't figured out how to unwind cmo's and cds's. The are so inter-related, the term is counter-parties, in their transactions that its almost impossible to seperate them. The banks are raising interest rates to create cash so they can cover toxic assets. I can't think of a reason for Citi to close accounts, it doesn't make sense. Like what was posted earlier 12% minus 10% = 2% thats a ton of money. On top of that every buisness owner has to pay a transaction charge. Everytime you swipe a piece of plastic through a reader whatever companies name is on that card gets a cut of the total sale. Also, if credit card companies are doubling rates on "in good standing" accounts could that be fought in court under laws regarding usary?

Originally posted by VelmaLu

If you jack the interest rate up to 30%, those who are the most willing and able to pay interest will stop using your card. Those who remain are likely not good credit risks and your chance of earning any money is significantly reduced, even at the higher rates.

So why do it? Why do you drive off your best customers? .

SHORT TERM THINKING. People are often judged on a quarterly basis. The big dogs say, "Get results this quarter or you are fired!" So the the next rung down thinks, "Well, I'll just do this or that and we'll worry about the problems it creates next quarter. Besides, by then I might be at a different company anyway. My luck has held out this far so I'm sure it will hold out a little longer..."

Its the same kind of thinking that got America and much of the rest of the world into this mess to begin with. And its not only at companies...what percentage of people live month-to-month, without even one or two extra month's worth of savings? I don't know the answer off the top of my head, but I have seen stats on this before and I do know its a staggeringly large number.

The whole thing is just another manifestation of the instant-gratification culture, the "gotta have it now, we'll worry about the fallout later" way of thought. Its worked its poison way into the big banks and now this is the result.

It looks more and more likely that CITI is about to go under this sunday night Oct. 25th.