Latest Good News from Citi ?

[Anonymous]

After recently ratejacking me to 29.99% and changing to Variable rates and starting to Balance Chase me last month just as I started making larger payments I get this notification in my last statement:

We are changing your account terms. The standard *

* purchase and standard cash advance APRs on your *

* account will no longer increase when the U.S. Prime Rate*

* increases. Effective 02/22/10, these variable APRs *

* change to non-variable APRs as follows: *

* *

* Standard Purchase **APR**: 29.99% *

* Standard Cash Advance **APR**: 24.99% *

At first glance this appears to be a good thing. What would be the point of this - I don't trust Citi to do ANYTHING in MY Favor.

[Jazzzy]

Heck...most of the cc companies just got switched to variable rates.

Now Citi is going back to fixed rate on your account?

No, I don't see this as being of any benefit to you. If, for example, things get bad enough and interest rates go high enough that these rates aren't cutting it, they'll just raise them.

And...I don't think I've ever seen a cash advance rate that is lower than the purchase rate.

[Anonymous]

I just got the variable-to-fixed rate change notice on my Citi statement as well (no change in the actual rate since Jan 2009, though).

I'm very suspicious also - there must be a hidden benefit to Citi to do this. It makes no sense otherwise, with virtually every other bank and many CUs going the opposite direction, from fixed to variable ...

[Anonymous]

The only thing that comes to mind is that under the new rules payments over minimum will now apply to the purchases rather than the cash advances first, although with the balance chasing there isn't any cash to BT or use anyways.  They lowered the CL enough so that if I hadn't been watching and made a second payment that month it would have triggered an overlimit fee if I had charged virtually anything on the card.  Still can't see the advantage for them in the fixed rate considering recent speculation that the Fed may be raising the Prime soon??  I started an aggressive paydown plan by increasing the headroom on all my accounts by $1K and PIFing two Cap One and a Discover that had offered good BT deals in the past.  Within a week Citi, (2) BofA and a Chase (aptly named) were all Balance Chasing so I parked my wad in my HELOC and decided to wait until after the dust settled on the 22nd to reevaluate my strategy for best FICO impact.