Is this my personal bailout for the credit industry?
Yesterday, I paid off Citibank for the last time. Today, I logged in to verify it had posted, and noticed my interest rate had jumped 5.5%. Has my new regime of frugality displeased the overlords? (Anon because I know some of you and am embarrassed about my money issues.) Last year when I got serious about my consumer debt, I used Citi’s low-APR balance transfer offers to consolidate all my credit card debt. The total of transfers and existing Citi debt gave me a balance in the mid-$20K; the transfer APR was 2%, and the purchase/existing APR was 13.3%.
The balance transfer period is about to end, so I decided to clean the dogs out of my investment account and get out of debt in one easy payment. Yesterday was the last day of my statement period; I paid the current balance in full. When I logged in today, the current balance was only the interest charge on the previous period, so I paid it off too. Then I noticed that my APR had jumped to 18.8% overnight!
I’ve seen a number of stories about Citi jumping people’s rates inexplicably since the current crisis started. I know that, by not using my credit, I am less useful to Citibank. Still, I wasn’t expecting a hike back to where I was in my less creditworthy days. Are they betting that I will be unable to resist using my card again and that I didn’t notice the boost? Is the hike coincidental to the zero balance, making my ragefest at Vikram Pandit meaningless?
Original text: Is this my personal bailout for the credit industry?
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