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Regular Contributor
Posts: 174
Registered: ‎11-05-2008
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What to do about Citibank APR increase?

I received a letter from Citibank (my very first credit card from 1998) that my APR will be increasing from 7.49% to 24.99% variable.  I have no late payments on my credit report.

 

I have *very* high debts I am trying to pay down and no balance transfer options (not any lower than 16.99%).

 

I can opt out of the APR increase and continue paying under my current terms, but then my account will be closed.  I am concerned this will ding my credit report because I've had this account the longest (my next older account is from 2000) and once it's closed it's done.  Should I just opt out, pay off this card with the current low APR and bite the bullet when the account closes (probably in a year?)  Will this look bad on my credit report if it will say closed by creditor?

 

My other cards have higher APRs, so paying those off first is my priority.  I am paying down as much as I can per month short of eating a brick of ramen a day.

 

Should I keep the Citibank card open and pay it off at 10% higher or just opt out and pay at the low rate?


Starting Score: 557 (2005)
Current Score: 803
Goal Score: 805


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Contributor
Posts: 101
Registered: ‎08-04-2008

Re: What to do about Citibank APR increase?

Even once it's actually closed (someone will correct me here if I'm wrong), it will stay on your credit report for 10 years.

 

By then your other cards will have aged and it shouldn't be a huge deal, I would think.

 

Do what's right to get your financial situation straightened out - worry about credit report dings secondarily - the former will be a lot more beneficial to you long-term than stressing too much about the latter.

 

Best of luck to you. Smiley Happy Sounds like you're on the right track!

Regular Contributor
Posts: 174
Registered: ‎11-05-2008
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Re: What to do about Citibank APR increase?

Thanks for the advice!  It will be sad to see my very first credit card closed, but if they treat their customers like that, then phooey on them.  If they increased my rate 3% because of economic climate, I wouldn't be happy but would accept that but an increase of 17.5% with no reason?!  I know these banks are a business and can do whatever they want, and their main concern is not going under (not keeping customers - they just lost one).  It's just a little crazy.  At least they are letting people opt out and pay under their old agreements...

Starting Score: 557 (2005)
Current Score: 803
Goal Score: 805


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Regular Contributor
Posts: 174
Registered: ‎11-05-2008
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Re: What to do about Citibank APR increase?

Sorry to bump up this old post, but just wanted to update and ask for some advice.  My Citibank Platinum Select card is now closed.  I opted out back in 2008 when they raised my apr.  The opt out would keep my 6.75% rate but close my account once my card expired.  Ironically enough they did lower my apr a notch (to the 6.75% rate) after I opted out.  Gosh, I wish the credit card act was in place before all the apr jacking.

 

Anyway, I was wondering what my chances would be of reopening this account if I called customer service.  Has anyone had this kind of luck?  This is my oldest account (I think I got a free t-shirt when I applied for this in college), so I was bummed to see this one go.

 

Also, I read somewhere that if your account is closed with a balance, then the credit limit the card had when it was closed still factors into the FICO debt to credit ratio.  Is this true?


Starting Score: 557 (2005)
Current Score: 803
Goal Score: 805


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