I received a letter from Citibank on Saturday just after I heard on a radio show that they and some other companies are sending out such missives to clients. Lo and behold, I got one. It seems they're upping the rates and fees on my account with them. Now I pay off my balance with them each and every month so I'm not too concerned, but it is a warning to us all that times change.
If you get such a letter and you are carrying a balance, then you're not as ambivalent as I am. I understand since there's money on the line. Here's how you can handle this. If you have a balance and the issuer wants to raise your rate to a level that will hurt you, then you have the right to opt out of the new terms and conditions. What does that mean? It means you don't have to play ball with them. They can't force you to accept the new terms.
But, what they can do is cancel your account as soon as your current term expires. That's specified by whatever the expiration date is on your card. If it expires in a month or two, you're toast. If it expires in a year, you're golden.
If you're on the toast side you can try to move the balance to another card at another bank, but chances are you'll pay a 4% transfer fee (used to be 3%) and your rate might not be all that good, but if it's less at all, then you might make out for a while. Until that bank changes their terms. Look at Discover for favorable terms on a balance transfer.
If you're on the golden side, you can opt out and decide what's your best move as your card nears expiration, or do nothing like me. One thing you should do for sure is avoid carrying a balance if at all possible. You are totally a sitting duck if you're carrying a big balance on the bank's books.
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