There's a front page diary on how Citigroup is in trouble. I have two credit cards with them, with balances that I pay a little more than the minimum payment on each month. Usually on time. I haven't been unhappy with them, as credit card companies go they've been just fine to me.
They did something recently, though, that really appalled me. I was just toodling along, paying my bills and watching expenses while the economy craters (sorry, but I love that expression). I did not ask CitiCards for anything.
Completely unsolicited, I got an email entitled: Congratulations on your credit line increase!
Your credit line is now $30,000.* Enjoy the added spending power and flexibility that comes with your higher credit line.
Buying power is in your hands. You can use your card for all your purchases - from everyday expenses like groceries and clothes, to big-ticket items like vacations and home improvements.
I'm a college graduate and a single mother. I work in the human services. I'm eligible for the Earned Income Tax Credit. $30,000 represents most of my pre-tax annual income; it exceeds my adjusted gross income.
I'm not going to use it. I've been trying really hard to pay down the debt I have, but cars have a way of breaking down and kids need new clothes so my balances never really seem to go down by much.
There's just something grotesque to me about a credit card issuer handing out unsolicited credit line increases in the middle of a recession without any regard to ability to repay.
I'm not mad at Citi. The interest rate - 12.9% - isn't bad as these things go. I just think it's a really dangerous, irresponsible thing to be doing and if that's the kind of lending they think is okay, well, no wonder they're in trouble.
Oh, hell to the no! As I finished writing this, they just announced a $300+ billion dollar bailout...MSNBC has the headline:
Government to back $306 billion in Citi loans
Feds will also take direct $20 billion stake in troubled financial giant
So my $30,000 credit line at 12.9% on an income in the mid-30,000 range? I guess that's our tax dollars at work. I'm glad we elected the right president, but, man, he's got some work ahead of him.