Sunday, November 8, 2009

AT&T Universal Card Interest Rates

Update: 12/18/09 - Citibank just slashed my AT&T Universal Card credit from $20,000 to $1,000. My only answer is to transfer all my 'real' funds from Citibank to another bank. This is really outrageous.

Update: 11/10/09 - This article published in the NYTimes.

[This to the Times, but to anyone else who has this problem - start writing: your congresswoman or -man. Your newspaper; on your blog. Write.]


Is anyone covering or has anyone covered - or does anyone plan to cover - a story about the AT&T Universal Card (Citigroup) raising interest rates from, in some cases, below 7% to over 29%*?

This happened to me recently: I noticed that my APR had gone from 11.9% to 18.9%. When I called to ask what had happened, and to ask to have it lowered, I was told that it was the result of a change in the credit card agreement, which I had not read. I was told that, in fact, the APR would go to 23% unless I rejected the change in terms - in which case my account would be closed at the end of its lease, so to speak.

I was dumbfounded.

This for a customer who has never been late, never been over the limit and who, in fact seldom uses the card. It is one of two credit cards I own.

I am lucky, as I have a low balance and can easily pay it off, which I have done, ahead of closing the account. I was told on the phone that I could close the account and then pay it off! Following this awful advice would have damaged my credit rating. As it is, closing one of two credit cards will probably lower my credit rating, but I cannot, in good conscience, keep a card that rewards its customers with robbery. What about people with significant balances, paying as agreed? Haven't the banks just BEEN bailed out? Who created the mess we're in???

It's wrong.

A cursory trip through the Web shows on blogs and in chatrooms* [29% mentioned here] that this phenomenon is widespread. My blog gets hits every day from people googling AT&T APR since I posted about this. People are being fleeced. Good customers, not delinquents.

I am deeply disturbed. In fact little has unsettled me as much as this has. What are the wider implications? Is it being done for an immediate pay off, regardless of lost customers? Does it contain even fragments of the makings of a class action lawsuit? Who else will follow suit?

I've just become an American citizen. I am learning that some animals are more equal than others.

14 comments:

  1. Michael had a similar thing happen with his Capital One card, which he promptly cancelled. I also remember reading about this going on with Amex, on a widespread basis. Not with deadbeat customers, either. Maybe that's it...you don't incur enough finance charges to be a moneymaker for them.

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  2. Marie, this is a widespread issue. All the banks are doing it now. First they issued all those cards to anyone who could sign a name, and they encouraged people to use them instead of cash. Now, with people in debt to their ears and the banks pulling back on credit, they are raising the rates.

    If the bank does not charge an annual fee for just keeping the card and not using it, you can keep the account open with a zero balance. This will keep your credit rating in good standing.

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  3. LN - yes, I wondered whether that was it.

    Lisa - the thing about keeping the card is that I don't want to keep it, in principle. I know it makes sense to not use it, but what they have done is wrong, and I don't want them in my wallet or my sock drawer.

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  4. M - Actually you will drive them crazy if you keep it open and don't use it. But I totally understand your motive and do think you need to stand by your principles. In fact, if more people did, maybe they would get a clue!

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  5. We can thank our legislators, including former senator Biden, for changing interstate banking rules. It changed everything. You bet they are raking in as much as they can to shore up a failing sector.

    Can-goto-hell.

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  6. Credit card operators are all snakes. Shocking story - and isn't it funny how they always bury that sort of catastrophic change in terms in the bland-looking fine-print of a letter you are guaranteed to throw away?? Congrats on the citizenship, btw... I'm still playing the Green Card lottery...!

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  7. Jim just had the same thing happen and I am waiting. As he said to the rep on the phone, "maybe you can get off script for a minute or turn off the recorder to show me there's a human being in there somewhere which trust, i do not expect, but didn't my motherf*cking tax dollars just pay your motherf*cking salary this year?

    I like your principles sister but how to win with the american corporation of banking is still a (very frustrating) mystery to me...

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  8. Just got my own notice today, raising my rate to 20.99%. I never carry a balance, so I never actually PAY the interest rate, but in the spirit of "I'm Mad as Hell" I think I'll cancel. It's my secondary card and I'm sure I can find a better deal out there. Let's all stand up.

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  9. I agree. I am very distributed about CTI(AT&T Unversal Card). Because of their ways with their long time customer(charter member), I will be switching to another card. Have had my fill of them.

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  11. Marie,

    AT&T has also raised my rate from the agreed upon 7% to 29.99%. I have perfect credit and have never been late on any credit card or bill. I called customer service they said I had received a notice to opt out but I didn't respond in time. I never saw any notice. I told them to resend the notice and open up the option-they said they would not.
    It is criminal and someone should start a Class Action.
    My balance is a bit higher and I will fight to get the rate back to 7%.
    Karl D

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  12. Hi, I generally don't make any posts to any websites, but AT&T Universal just irritated the heck out me recently. Apparently, keeping a credit card with zero balance for a long time is NOT the thing to do. I have had my AT&T Universal card since 1995, and just recently got a letter in the mail that said "A routine review of your account activity shows that you have not used your AT&T Universal Card account for an extended period of time." Then it goes on to tell me that "Due to prior inactivity, your account will be closed on December 28, 2009." I called them up and also wrote them an email asking them to keep my account open, but the customer service people told me there is nothing they can do because it is company wide. Also, they said that I can re-apply for another credit card. I don't think so. If I reapply, I won't be going back to AT&T Universal Card. It is one of two cards I have, and it was generally my emergency card, but now I won't have that second card as back-up. I am very disappointed at what they are doing, but the reason they gave me was it is "because of the current economic environment". I think it's because they aren't 'making money' from me since I don't carry a balance, which means they can't charge me fees. I had always paid off my credit card whenever I used it and was a customer in good standing. I am not happy with what AT&T Universal Card is doing and don't know if there is anything I can do to fight it. Has this happened to any of you?

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  13. Universalcard Charter MemberDecember 14, 2009 at 5:22 PM

    I can echo all of the foregoing. I got the AT&T Universal Card at its inception (1990), when it was one of the first to end the stampede toward annual fees. However, since Citibank became involved instead of AT&T, it has gone steadily downhill. When I asked them this month why adverse action had been taken (raising my rate to the "Penalty APR" of 29.98% supposedly reserved for over-the-limit users, etc.) I got the same "economic conditions" excuse blather that others have mentioned. I am going through the same debate... whether to dump it entirely, or merely reduce its use to nearly nothing. I WANT to cancel it. If I do so, I will also dump all my AT&T services, and tell them why, as well. After all, they are letting Citi user their (AT&T) name. Most agreements require that the licensee to nothing to "damage the brand", and Citi definitiely is! Dump them both, and tell them (corporate level, not merely Customer Service) why!

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  14. Curious to know how it went with your interest rate fight, Karl-

    No joy from Citibank on this one. The customer does not count. I bank with Citibank, too, and considering transferring my funds to another bank.

    Write to your congressperson, and let's take it from there. That's what I'm doing.

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