Guess what I just got in the mail today? A letter from CitiBank (South Dakota) telling me about the changes to my credit card account terms. This is what it says:

Dear ***** ******

We are making changes to your account terms.

To continue to provide our customers with access to credit, we have had to adjust our pricing. The terms of your account will be changing. These changes include an increase in the variable APR for purchases to 29.99% and will take effect November 30, 2009. As always, you have the right to opt out and pay down your balance under your current terms. If you opt out, you may use your account under the current terms until the end of your curent membership year or the expiration date on your card, whichever is later. At that time, we will close your account.

If you accept these changes, we have designed a program where you can earn interest back each month that can help offset the increase in your purchase APR.

Earn interest back every month

Here’s how – make your payment on time every month.

Each month you do, you will receive a credit on your billing statement equal to 10% of your total interest charge on purchase balance. This can help offset the increase in your purchase APR. Start earning interest back in December and January, and you will see the full credit on your statement no later than February 2010 and monthly after that.

If in any month you do not pay on time, you may not be eligible to continue to participate in this program.

We reserve the right to change or end this program with 30 days’ prior written notice. Please see the back of this letter for further details.

I’m not going to bore you with the rest of the letter but here are my thoughts.

29.99%, holy crap! Do the credit card companies really expect people to accept these terms? I know that I will be paying down that credit card by the end of the year and never using it again. Its very important that you DO NOT close your credit cards, no matter how upset you may be. Building a good credit history takes time and, well, a history. So if you close your credit card, then you lose that history for however long you have been building it with that particular card.

It seems like the credit card providers have forgotten about customer service, keeping their customers happy, providing a quality product, but instead it seems like they only care about the future credit laws that are coming out as early as December 1st. It will be interesting to see how this plays out. I have 8 credit cards (only use 3 of them and have very little debt with them), but I do expect to get more of these letters. Hopefully there will still be a credit card provider out there who actually cares for their customers and not charging the he*l out of them.

That’s it for now!

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